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Does one pay taxes on an inheritance from overseas?

If inheritance is nontaxable income, why did i pay taxes on it?

  • hi, i got an inheritance of about 120,000$ when i was 15. but i couldnt receive it until i turned 18. so my mom decided to invest it with edward jones until i turned 18 and could receive it. but i turned 18 a few months ago and when i went to withdraw it, we sent about 30% of the money to the gov. for taxes. will i receive this back in my return? do i need to pay those taxes? is there a way i can get this money back? by the way, im in wisconsin. i dont know if that has any difference.

  • Answer:

    There is no income tax on an inheritance. There is an Estate tax, but there is a large exemption so no tax was probably paid on the Estate. When you withdrew it from Edward Jones, there may have been a capital gain or loss based on liquidation value of stocks or bonds vs their cost. The tax withheld should be subtracted on Form 1040 as tax paid/withheld and any amount over the amount you owe should be refunded. You probably need to go to a CPA to have your taxes prepared. You might benefit by setting up an early appointment so the CPA can advise you on how to get your cost basis in the stocks or bonds in order to calculate the capital gains or losses properly.

robert at Yahoo! Answers Visit the source

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1. Inheritance is not a nontaxable income. There is no federal income tax on inheritance. But if you inherit, IRA or retirement benefit it will be treated as your income that is it will get same treatment as it would have got in the hands of deceased. 2. You inherited $120,000 3-years back. Then you invested it. Any gains is your taxable income. You will report it on schedule D (Form 1040). 3. Now you report your income on 2009 tax return and report the taxes already paid (taxes withheld). You may have a refund.

Jss

You probably did not pay inheritance taxes on the $120,000,but paid income taxes on the interest. You should have gotten a statement from Edward Jones as well as a verbal explanation. You could have also continued to add to the account so that it would grow more and saved for retirement.

Ralph T

Wow an 18 year old with 100 grand that is gonna be gone in the next 5 years unless you let someone smart manage it

Ron Brgundy

the initial $120000 is not taxable but the interest it earned over the years is taxable

tro

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