My grandfather passed away and left me $5,000.00 in an investment fund. I cashed the investment and put it into my savings. Do I have to claim that as earned income on my taxes?
2007-01-06 09:42:41 · 5 answers · asked by UnivDude 1 in Business & Finance ➔ Taxes ➔ United States
if the amount is under 2 million you don't have to claim that.
But remember that the your basis for the investment is on the transfer date, which is the day of death. lets say if the value of the investment was $4,000 on the date of transfer, and you sold it for $5,000. the $1,000 gain is consider long term capital gain(you pay either 5 or 15 % tax). if you got it for 6000 and sold it for 5000, you can take that $1000 as LT capital loss.
2007-01-06 15:53:11 · answer #1 · answered by clu25 2 · 0⤊ 0⤋
Sorry for you loss.
Assuming the "Investment Fund" was in a after-tax mutual fund, the only thing you would need to worrying about is if the fund increased in value between the date of death and the date of the sale you would need to pay capital gains on the difference. If it dropped in value you would get to claim a loss.
2007-01-06 09:57:00 · answer #2 · answered by Wayne Z 7 · 3⤊ 3⤋
Congratulations!
Inheritances are TAX FREE to the recipient.
The estate that gave it to you is only taxed if the amount is in the Millions!
The WealthBuilder
Tax Specialist
2007-01-06 09:51:14 · answer #3 · answered by WealthBuilder 4 · 1⤊ 1⤋
Usually, inheritances aren't taxable. I accidently declared an inheritance one year and had to file an amended return later to get it back...
2007-01-06 09:52:05 · answer #4 · answered by Sharyn 5 · 0⤊ 0⤋