Watch out for “income in respect of a decedent” issues when receiving an inheritance

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Watch out for “income in respect of a decedent” issues when receiving an inheritance

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April 23, 2024 Kevin Brunelle inheritance, IRD

IRD inheritance

Most people are genuinely appreciative of inheritances, and who wouldn’t enjoy some unexpected money? But in some cases, it may turn out to be too good to be true. While most inherited property is tax-free to the recipient, this isn’t always the case with property that’s considered income in respect of a decedent (IRD). If you have large balances in an IRA or other retirement account — or inherit such assets — IRD may be a significant estate planning issue.

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There’s a favorable “stepped-up basis” if you inherit property

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April 18, 2023 Kevin Brunelle fair market value, inheritance, step down, step up

property inheritance

A common question for people planning their estates or inheriting property is: For tax purposes, what’s the “cost” (or “basis”) an individual gets in property that he or she inherits from another? This is an important area and is too often overlooked when families start to put their affairs in order.

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When inheriting money, be aware of “income in respect of a decedent” issues

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March 15, 2022 Kevin Brunelle income in respect of a decedent, inheritance, IRD

income in respect of a decedent

Once a relatively obscure concept, “income in respect of a decedent” (IRD) may create a surprising tax bill for those who inherit certain types of property, such as IRAs or other retirement plans. Fortunately, there may be ways to minimize or even eliminate the IRD tax bite.

Continue Reading: When inheriting money, be aware of “income in respect of a decedent” issues