Money Girl's Quick And Dirty Tips For A Richer Life

1048. Receiving an inheritance can be a life-changing financial event, but passing a portion of those funds along to family members comes with a unique set of tax rules. Host Laura Adams breaks down the federal tax consequences of sharing an inheritance. You’ll learn how inherited assets are taxed at receipt, how the federal annual gift tax exclusion works, and smart tax-free strategies to help your loved ones without triggering extra tax paperwork.Key Takeaways:Receiving plain cash or life insurance proceeds does not trigger federal income tax, and you do not need to report it on your federal return. However, a gift giver could owe state tax depending on where they live. As a gift giver, you can exclude up to $19,000 per person per year (or $38,000 if married) without reporting it. Gifts above the exclusion simply require filing IRS Form 709 to count against your $15 million lifetime exemption, meaning almost no one owes actual gift tax.Inheriting property or taxable investments adjusts the asset’s