Inheritance

[tobee43]

Are you certain about that? While the principal inheritance is not taxable as income, if the estate earned income (interest, dividends, etc.) between the date of death and the date of distribution and that income was distributed to you, you (and the IRS) will receive a K-1 from the personal representative of the estate reporting the net income that you must report on your return.

paying the tax usually depends on where you live, and your relationship to the deceased....


or depending on whether the pay out was; for example......Life insurance proceeds..... paid to you, are used in the calculation of the gross estate and may be taxable...

if you have not rec'd a k-1 by now...chances are you will not.
also... k-1 1065 are usually for business....Schedule K-1 is used to report a beneficiary's share of income, deductions, credits, and other items from pass-through entities. These generally include limited partnerships, S Corporations, income trusts, and limited liability companies....so one rarely sees them in this type of situation.

federaly taxes you should be fine.....state maybe not depending on what type of estate the monies came from. i have worked with estates that had over 500k and had to pay no FEDERAL taxes...however, they WERE NOT in bankrutpcy.

i have also worked with people who indeed did have to pay on much less amount because the source of the inhert. funds came from property...which was sold and they had to pay taxes on the capital gain...(LOL...they actually inhert. the Capital GAIN!!).


Inheritance Tax Basis

"The first step used to determine any inheritance tax that might be due is to calculate the fair market value of the entire estate. This would include cash, bank accounts, stocks and bonds, real state, insurance, and similar items of value. The total fair market value of all these items is termed the Gross Estate".

i.e. In this example, you are receiving a total of 12 x $10,000 or $120,000, which is $20,000 higher than the lump sum of $100,000. This means that you would need to pay income tax on the $20,000 received in the form of interest income.


really do yourself a favor..... if you are in chapter 13 run this by your attorney.

only because it could come back to bite you...like the trustee could want to reclaim those funds for distribution. (if it was found out somehow).

[LadyInTheRed]

I certainly will not lie, but they really cann't. They can search probate records or asset searches, but my name is not listed there. I guess I'll have to report it on my taxes, but it's not taxable.

Are you certain about that? While the principal inheritance is not taxable as income, if the estate earned income (interest, dividends, etc.) between the date of death and the date of distribution and that income was distributed to you, you (and the IRS) will receive a K-1 from the personal representative of the estate reporting the net income that you must report on your return.

[tobee43]

The most important aspect of a Chapter 13 plan is that your whole financial house (so to speak) is under the control of the Trustee during the life of your plan.

Report the inheritance to your attorney. The very last thing you want to happen is to have your plan dismissed after paying in to it for 3 years.

good advise!! i would do it asap...just to be safe.

[newbie2]

The most important aspect of a Chapter 13 plan is that your whole financial house (so to speak) is under the control of the Trustee during the life of your plan.

Report the inheritance to your attorney. The very last thing you want to happen is to have your plan dismissed after paying in to it for 3 years.

[usmccop]

I'm curious, how would the trustee find out? If it happened 3 years ago then I'm guessing it hasn't showed up in their taxes? How else would the trustee "discover" it. I'm not suggesting that anyone HIDE anything but I'm just curious, what sorts of "checks" does the trustee typically do before discharge and how likely is it that, if not discovered yet, that it would?

Please, these are all just questions, I'm not suggesting anyone do anything illegal...

I certainly will not lie, but they really cann't. They can search probate records or asset searches, but my name is not listed there. I guess I'll have to report it on my taxes, but it's not taxable.

[usmccop]

The OP said she "filed" three years ago, not she "got" her inheritance three years ago. I have no advice, just wanted to restate the facts....

Correct... I filed 3 years ago, but I received the inheritance about 6 months ago.... I have 2 more years on my plan.

I went on Pacer and printed out my 13 filing, the confirmation and confirmation by the judge... There is no order to report an inheritance or even increased income. My question now is who and what says you have to do anything?

[sassiebaz]

The OP said she "filed" three years ago, not she "got" her inheritance three years ago. I have no advice, just wanted to restate the facts....

[becky20]

I'm curious, how would the trustee find out? If it happened 3 years ago then I'm guessing it hasn't showed up in their taxes? How else would the trustee "discover" it. I'm not suggesting that anyone HIDE anything but I'm just curious, what sorts of "checks" does the trustee typically do before discharge and how likely is it that, if not discovered yet, that it would?

Please, these are all just questions, I'm not suggesting anyone do anything illegal...

[tobee43]

thank you very jane, i most certainly agree....and appreciate your words of wisdom...i hope these people will listen...we have been through enough stress. i shouldn't have bother to defend myself in the open.


my sincere apologizes to anyone that had to subject themselves to this. i should have just ignored it.

[jane taylor]

Hi! I don't visit this forum often much anymore as I work full-time and have been discharged from our CH 13 almost two years. I did; however, want to respond to the original post about inheritance.

The question "Do you expect to receive an inheritance . . . ?" did come up in our initial meeting with our attorney. I did not know at that time that my aunt was very sick and would pass away within 18 months of our filing CH 13 BK. I ended up inheriting over $30,000 and my cousin left it in my aunt's bank account for several months and we paid on our Plan as agreed. We could have had it "tied up" until we finished our 60 month plan, but elected to go ahead and have my cousin release the funds and then paid the stupid thing off. Needless to say, I consulted my attorney every step of the way.

Although I didn't want to give the trustee the money since we were in a 14% payback plan, I owed the money and it was only right I paid my creditors. I'm just glad it is all over.

Best wishes. For those of you who choose to behave in a foolish and childish manner, please do so in another forum. People here are stressed enough.

Deep peace,

jane

[Pandora]

pandora,

don't open your box to wide. i'm here to "relax" and i really don't care what you or anyone thinks.

i have been through enough in my past 3 years from having every bone in my face replaced to losing everything we worked 40 years for. so shut your mouth and fingers and move on.

the only one's that have exhibited being immature is you and people like you. bullies who think they know it all,uneducated and big mouths. have i gotten personal...NO...but for some reason immature people feel compelled to attack...well...you chose the wrong person....MOVE ON...PANDORA...back into your box...

and i see you gave the OP the exact same answer as me....ODD??? isn't it?

this site is design to share one's experiences....experience ONLY not to give legal advise. so if one doesn't like what i write simply do not read it.

i am NOT here as a paralegal....i'm no longer getting paid $400 a day to think and do research. this is an outlet for all of us. me included. we all share our experiences of what we went through...however, since many of you chose to be judgmental that's YOUR problem, i will NOT let you make it mine.

if you would like me to prepare documents or write a paper, and do research, then one needs to pay for it...i have "billable" hours.

i don't need to explain myself to YOU or anyone for that matter. so PLEASE find better things to do with your life and when you WANT legal advise don't make it up with a google search...seek the advise of an REAL attorney.

thank you for the "ignore" buttons....this site really has some crazies on it.

again.....these SAD people...what you follow ME around and read my posts...am i that interesting to you...GET A LIFE PLEASE!

LMFAO...

okayyyyyyyyy If you really honestly think that I am following your postings around - try again. you are posting information all over the board - in just about every post so dont flatter yourself. its kind of hard to miss not reading your very "informative" postings when you post in every damn category and have an answer for every frigging thing.

Get a grip, quit sending me PM's (they wont be read and I really dont care) and stay out of my box

[tobee43]

pandora,

don't open your box to wide. i'm here to "relax" and i really don't care what you or anyone thinks.

i have been through enough in my past 3 years from having every bone in my face replaced to losing everything we worked 40 years for. so shut your mouth and fingers and move on.

the only one's that have exhibited being immature is you and people like you. bullies who think they know it all,uneducated and big mouths. have i gotten personal...NO...but for some reason immature people feel compelled to attack...well...you chose the wrong person....MOVE ON...PANDORA...back into your box...

and i see you gave the OP the exact same answer as me....ODD??? isn't it?

this site is design to share one's experiences....experience ONLY not to give legal advise. so if one doesn't like what i write simply do not read it.

i am NOT here as a paralegal....i'm no longer getting paid $400 a day to think and do research. this is an outlet for all of us. me included. we all share our experiences of what we went through...however, since many of you chose to be judgmental that's YOUR problem, i will NOT let you make it mine.

if you would like me to prepare documents or write a paper, and do research, then one needs to pay for it...i have "billable" hours.

i don't need to explain myself to YOU or anyone for that matter. so PLEASE find better things to do with your life and when you WANT legal advise don't make it up with a google search...seek the advise of an REAL attorney.

thank you for the "ignore" buttons....this site really has some crazies on it.

again.....these SAD people...what you follow ME around and read my posts...am i that interesting to you...GET A LIFE PLEASE!

[Pandora]

then...YIKES...anyone else have a thought about this...i would say if you r in chapter 13 you should talk to an attorney...just to be safe.

Ok..this is just killing me so I'm going to say it after reading through copious postings and responses and quite frankly, its irking my last nerve (sorry)

Tobee43, you claim to be a paralegal yet your language dictates that of a teenager. Are you? If you really ARE a paralegal, perhaps you should be conducting yourself in a manner that behooves you and the profession - I, personally would never retain a legal office or paralegal that talks the way you do or conducts as you do. Just a suggestion.


As to the OP's concern:

It should have been disclosed from the beginning if you are 3 years into a Ch. 13 plan, yet you received it 3 years ago, as it would have had to be included in the look back period. Perhaps you should look over your paperwork and see if the amount was actually exempted and you just forgot - if it wasnt, then I'd probably call your lawyer to discuss the ramifications. You dont want to have your Ch. 13 dismissed after paying on it all these years.

Better to be safe than sorry.

[tobee43]

then...YIKES...anyone else have a thought about this...i would say if you r in chapter 13 you should talk to an attorney...just to be safe.

[usmccop]

well...then...if they haven't found it in 3 years...what would make you concerned now?

I'm still in my Chapter 13 plan. 2 more years to go.