Money & Government......

Updated on June 22, 2010
K.B. asks from Savannah, GA
8 answers

This might be kind of complicated, so I'm going to try to keep the sentences as short and sweet as possible. Okay:

My family owned several acres of land, which was in my father's name.
This farmland was in Tennessee.
My father passed away in October of 2006.
My family sold our farm (land) early this year; 2010.
I was given $33,000 as an inheritance.

Am I going to owe money in to the government on this money, such as taxes?
Do I need to prove that this was an inheritance and not a gift, because only one parent was dead, and my mother is s till living, will it be looked at as a gift and not as an inheritance?

I am trying to figure this out now so I'm not up a creek next year!

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S.B.

answers from Kansas City on

I would talk to a CPA, it really depends. Was it held in a trust? That would make a difference. Many CPAs will do a cheap consultation, I know the one I work for does.

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S.H.

answers from San Antonio on

Don't allow your actions to depend on the answers you get on this forum. You need to talk with a tax attorney. Even if the consultation costs you $250 it is MUCH cheaper than the pentalties you will face for not following the law to the letter, even if it is because you don't understand the law.

I am sorry for the loss of your father. I do think that you have to pay taxes on this, but I am not the person to ask. :)

2 moms found this helpful

A.S.

answers from Davenport on

To the best of my knowledge, Georgia has no inheritance tax (but Tennessee does) and is subject to federal estate tax laws. As long as the sum total of the estate was under $1,000,000.00 then there shouldn't be any estate/inheritance tax. If this is a true inheritance then it should all have been taken care of in probate court. If your mom inherited everything as the spouse of a deceased person and then decided to give you some money when she sold her farm then that would NOT be an inheritance and she would have to pay a gift tax. If your dad had a will that said sell the farm and divide the proceeds equally among the kids then that WOULD BE an inheritance. If the will wasn't probated you should probably call an attorney in TN or an accountant to figure out if your mom owes anything.

1 mom found this helpful

T.F.

answers from Dallas on

Talk to a lawyer, CPA or financial professional to get the information you need.

This site is great for posing questions like this, however, unless you KNOW you are speaking to a professional, you cannot KNOW any financial obligations or not without talking to a professional.

A 1 hour or less meeting for $100 or so will be able to set you up so you know what you face with IRS and any other issues.

1 mom found this helpful

B.C.

answers from Norfolk on

A lawyer will probably be able to give you the best answer. Was there a will? Did you inherit the land or did your mother? It seems to me issues of probate would have been handled within 2 - 3 years of your father's death, but I know nothing of the laws which would apply in your state. If probate has already been settled and your mother sold the property afterward, then gifted you with some of the proceeds, then it might indeed be a gift as oppose to an inheritance, even if your mother thinks of it as an inheritance.

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J.B.

answers from Atlanta on

You need to check out the finer points of the law, but there is an inheritance tax on certain amounts. You need to find out what the amounts are! There are also gift tax amounts and gifts under a certain amount can be tax-free. Again -you'll need to find out what those amounts are. You should be able to find this info on the IRS website -whether or not this counts as inheritance or gift and what amounts are taxable. I want to say any amount over 10,000 has some tax attached to it whether it's a gift or inheritance.

Here you go -check out Publication 950 -Introduction to Estate and Gift Taxes. It's a .pdf that's actually pretty readable and easy to understand. If you have questions, call the IRS and speak to someone. We pay them through our tax dollars, so you should utilize them before you spend money elsewhere!

http://search.irs.gov/web/query.html?col=allirs&chars...

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K.P.

answers from New York on

You will have to pay inheritance tax on the money... you can receive up to a certain amount as a non-taxed gift. Each state is different, but you may be better served claiming a "gift" than inheritance!

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P.W.

answers from San Francisco on

Sometimes a good accountant is necessary.

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