Submitted By: someone
Answered: October 28, 2021 1:18 am

My spouse inherited a $30,000 bank account from her sister-in-law. Do we owe taxes on this?

Inheritances are tax free, regardless of amount. However, if the account starts to earn interest, your spouse must pay tax on the interest from the date of the inheritance.

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Tax Glossary

Nonperiodic distributions

A 20% withholding rule applies to nonperiodic distributions, such as lump-sum distributions, paid directly to employees from an employer plan.

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