The estate has finally been settled, and each grandchild received a $5000 check. I’m wondering if I need to set aside money for taxes after cashing it, or is it all ours to keep?
It really depends. The executor should know where the funds came from and if you’ll need to pay any taxes on it.
It’s best to ask the executor. They’ll know for sure if taxes apply to this amount, since we don’t have all the details here.
Check with the executor or ask an accountant if you have one.
Probably not, unless it’s considered income from the decedent’s account.
Only if it’s from a retirement account.
Does the government want a cut of it? Most likely yes.
Honestly, we need tax classes in high school. Not to judge anyone for asking—it’s just a gap in education.
Usually, the person receiving a gift or inheritance doesn’t have to pay taxes on it.
Bliss said:
Honestly, we need tax classes in high school. Not to judge anyone for asking—it’s just a gap in education.
Usually, the person receiving a gift or inheritance doesn’t have to pay taxes on it.
OP isn’t asking about a gift; they’re asking about inheritance.
@Avery
Gifts and inheritance often get lumped together by most people, but I appreciate the feedback. Keeps me sharp when I answer free questions that usually go for $500 an hour.
Bliss said:
@Avery
Gifts and inheritance often get lumped together by most people, but I appreciate the feedback. Keeps me sharp when I answer free questions that usually go for $500 an hour.
Wasn’t trying to be harsh, just pointing out that OP asked about inheritance, not a gift. I’d hope when someone pays $500 an hour, you’d stick to inheritance info if that’s what they asked.
In most cases, no taxes are owed by the person receiving a gift. The giver might have tax obligations if it’s a large amount. Some specific cases, like inherited IRA funds, may be taxable if they weren’t taxed before.
@Jai
This isn’t a gift—it’s an inheritance. There’s no federal inheritance tax, but some states have their own.