Legal Question in Wills and Trusts in New Jersey

is it taxable income

my mother made me beneficiary of an account worth 16,000. She passed away and I got the money and paid funeral expenses along with any outstanding debts. I kept all receipts. The Irs says I owe 5000 because it increased my income. I thought what passed between parent and child was not taxable. And I did not spend a penny on myself. In fact I received the money in august and paid all bills by september. help, i have to start a payment plan with the irs while i check this out so they wont put a lein on the house.


Asked on 3/14/08, 9:16 pm

1 Answer from Attorneys
Walter LeVine Walter D. LeVine, Esq.

Re: is it taxable income

You have not described what type of account it was, and this may be the cause of the problem. Traditionally, inheritances are not income, but this depends upon what you inherited. If the account was a retirement account (pension or IRA), it represents an inheritance of previously untaxed income of your mother, and you have become responsible for the taxes your mother had not paid. Contact me directly if you need more information.

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Answered on 3/15/08, 10:10 am


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