Legal Question in Wills and Trusts in Virginia

joint with survivorship bank account with deceased parent

My mother died recently and we shared a joint checking with survivorship bank acct in Virginia. The account has been closed and no interest dividend was earned. Do I need to include the amount ($13,000) on my tax return?


Asked on 3/10/09, 11:52 am

2 Answers from Attorneys

Jonathon Moseley Moseley & Associates Law Firm

Re: joint with survivorship bank account with deceased parent

It IS money transferred to you, and in that sense might look like income.

However, inheritance is NOT taxable income. It is an exception. (That is why there is an estate tax on very large amounts of inheritance.)

So the effect of rights of survivorship means that the money she had is transferred to you and is received by you as a sort of "income."

But inheritance is never taxed as income.

If the inheritance is very large, over several million dollars (the amount keeps changing), then THE ESTATE pays an estate tax before distributing money to the heirs. Technically the heirs do not pay (though it is a small distinction). The estate pays. That is the estate files the estate tax tax return. The heirs don't report it on their tax return. The estate reports it. (The tax gets taken off the top, so it still affects what the heirs get, of course.)

However, for only $13,000, there is no tax.

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Answered on 3/10/09, 12:53 pm
Jonathon Moseley Moseley & Associates Law Firm

Re: joint with survivorship bank account with deceased parent

It IS money transferred to you, and in that sense might look like income.

However, inheritance is NOT taxable income. It is an exception. (That is why there is an estate tax on very large amounts of inheritance.)

So the effect of rights of survivorship means that the money she had is transferred to you and is received by you as a sort of "income."

But inheritance is never taxed as income.

If the inheritance is very large, over several million dollars (the amount keeps changing), then THE ESTATE pays an estate tax before distributing money to the heirs. Technically the heirs do not pay (though it is a small distinction). The estate pays. That is the estate files the estate tax tax return. The heirs don't report it on their tax return. The estate reports it. (The tax gets taken off the top, so it still affects what the heirs get, of course.)

However, for only $13,000, there is no tax.

Read more
Answered on 3/10/09, 12:54 pm


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