Do you have to pay taxes on an inheritance?

People often wonder if they have to pay taxes on an inheritance. Inheriting a brokerage account or real estate grants the beneficiary a step up in basis, allowing them to use the current market value as their cost basis, potentially saving on taxes when selling these assets. In contrast, beneficiaries of an IRA are required to pay income tax on distributions over a 10-year period. When your assets total around $24 million, you start running into the estate tax, or as some people call it the death tax. Given the complexity and fluidity of tax laws, it’s always wise to consult with a tax professional for advice specific to your situation.

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Casey Smith
President, Wiser Wealth Management

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