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Question for the Money Doctors

Question submitted on Jun 5, 2013.

Question

When does money from an inheritance become income (other than interest earned).

Answer

Generally, most forms of inherited property are not subject to income tax. However, if the inherited property is as a result of
being a beneficiary on some type of qualified retirement plan, such as an IRA, 401(K) Plan, Pension Plan, Profit Sharing Plan, etc., then you will be subject to tax on the amount of the distribution.


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