Video Summary
Do I have to report money to the IRS for money that I received as a beneficiary of a probate proceeding? First off, let’s talk about a state taxes. The state of Florida has done away with the state taxes. So, there was none, no estate taxes to be paid to the state of Florida. The federal government has raised the federal estate tax limit to $11.8 million. So, if the estate or the decedent’s assets are less than that amount, there are no estate taxes. As far as money that you receive from a probate proceeding, or a probate state, you should not have to pay any income tax on it other than whatever the interest is, or the income from the estate, the personal representative of the estate is required to file what they call a fiduciary tax return or 1041. And then they file that and sign to you as the beneficiary, a K1, the amount of income that you would have to report on your income tax and whether it’s ordinary income or long term capital gains, the personal representative can deduct the expenses of the estate from the income. So that would be a minimum. It could be a minimal amount, but you’ll get a K1 from the personal representative. If you just inherited a bank account, you don’t have to pay any tax on the principal amount you receive. However, if you receive the interest on a bank account as a beneficiary, you would have to report that income on your tax return. If you have any questions, give me a call at (727) 847-2288.