When my parents died, they each left a trust for my disabled brother, which reverts to me upon his death. He recently died, and the trustee bank is in the process of terminating the trusts.
Obviously I will be getting professional help, but in the meantime, I'm wondering if this is likely to be a taxable event. I'm guessing that it is, essentially, an inheritance from my parents. Is that correct? Would that be taxable if it is under $500K or whatever?
In general gifts and inheritances are not taxable to the recipient. There are some minor exceptions to that. If there is an IRA, 401-K or other pension-type plan that includes money that was not taxed when earned, it may be taxed now. And interest or rent earned by the principal is subject to tax, though the trustee may elect to pay that so you wouldn't have to bother.
Obviously I will be getting professional help, but in the meantime, I'm wondering if this is likely to be a taxable event. I'm guessing that it is, essentially, an inheritance from my parents. Is that correct? Would that be taxable if it is under $500K or whatever? ======================= Inherited property is not taxable for income tax purposes, but income generated by it is. For federal estate purposes, the effective exemption is on the order of $5.3M. Depending on where you live and he lived, there could be an inheritance or estate tax at the state level.
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