Do I owe the irs taxes for a death benefit i received?

Asked over 1 year ago - Niceville, FL

I received a settlement $20,000 from my fathers passing, I put the money in a mutual fund for a year. I took it out with $300 loss and put it in the bank. The irs says I owe taxes($7000) on the transaction. I sent documents of the deposit and withdrawal to no avail.

Attorney answers (3)

  1. Jeff Tomberg

    Contributor Level 14

    4

    Lawyers agree

    Answered . since you didn't identify the source of the inheritance coming from a retirement plan IRA or any other source its possible you owe the IRS moneys from delayed income tax with penalties and interest. it would require a review of how you inherited the funds and the IRS lien letter to determine whether you owe the IRS money. ordinarily you wouldn't owe inheritance tax however you could owe money for deferred income taxes stemming from a retirement plan such as an IRA. see a lawyer or CPA

    without a detailed review by a lawyer can all the issues raised in your question be appropriately addressed...... more
  2. Robert Edward Fenster

    Contributor Level 14

    3

    Lawyers agree

    Answered . Although personal injury settlements usually are not consider taxable, your question is best answered by a CPA, not a lawyer. Sorry...

  3. Dennis Michael Phillips

    Contributor Level 17

    3

    Lawyers agree

    Answered . I assume you mean "settlement" in terms of money you inherited, not from a wrongful death claim. There are certain tax time bombs that can be passed to heirs. In my Financial & Estate Planning practice, this is something that I account for with my clients. I would like to know the details of your inheritance before I offer any suggestions as to how to go forward. You are invited to contact me by email or phone.

    Reach me at dennis@411financial.com, (877) 411-3462, or (954) 900-2939. Do you know the consequences of your... more

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