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Anonymous
Anonymous asked in Business & FinanceTaxesUnited States · 1 month ago

If a spouse dies and the other inherits their deceased partner's investment accounts, is there some kind of tax taken from them?

If so, does that not seem stupid, as these were married people and shared things anyways?

13 Answers

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  • 1 month ago

    That depends on the nature of the investments. Any tax deferred accounts will be taxable to the inheriting spouse when they draw from those accounts. IRAs and 401k and other similar plans that name the surviving spouse as beneficiary are generally rolled over into the survivor's traditional IRA without taxation. When any distributions are taken, only then is the money subject to tax.

    If the investments are not in tax-deferred vehicles, only the profits upon sale by the survivor are subject to taxation. And the laws of inheritance limit that. Let's say a deceased spouse owned stock value upon their death of $100k. They paid $10k for it. If they sold it while they were alive, they realized a $90k profit that would be subject to capital gains tax. But if the survivor inherits that stock, it's valued on the day of death of the deceased. It is like the survivor paid $100k for it, not the $10k actually paid. The survivor can sell it and have no taxable gain. But if the seller keeps it and later sells it for more than $100k, the gain would then be taxable.

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  • 1 month ago

    If they inherit the assets, there could be. if they owned them jointly, no. 

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  • 1 month ago

    Only when they sell what's in the accounts, then they pay gains tax on the gains.

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  • 1 month ago

    There is no tax on the transfer but the basis (what is normally cost) is changed to what the investments were worth when the dead person died.

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  • Eva
    Lv 7
    1 month ago

    There is not. Transfers between spouses are tax free.

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  • 1 month ago

    The only stupidity is your assumption. There are no inheritance taxes.

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  • 1 month ago

    Generally transfers without any tax implications...however...hire an accountant and/or estate attorney to help you...

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  • P
    Lv 7
    1 month ago

    Short answer is no there is no tax for spouses inheriting money from their spouse in 99.9% of all cases.      For family inheritance you don't pay any taxes under $11.58 million!!!  In essence inheritance is tax free for 99.9% of the population.   The Elite love spreading rumors making average people think they could be subjected to inheritance tax one day to keep the exemption limits absurdly high.  

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  • Judy
    Lv 7
    1 month ago

    most places no..................

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  • 1 month ago

    t depends upon how the securities were registered, whether they were in joint tenancy, and whether they had set up a trust that kicks in after death.

    • Nuff Sed
      Lv 7
      1 month agoReport

      None of that makes any difference for this question.

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