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As far as I know, inheritances are tax free except for special cases involving real estate gifting. If it's just a cash inheritance no taxes are due. Put it in a low cost ETF and pretend you never got the money.
$100K isn't going to be hit with estate taxes.
I agree with this strategy. Invest all of it. Don't use any of it to pay off a HELOC or a mortgage. Certainly don't blow it on depreciating assets like cars or outright spend it on consumer items.
The problem that needs to be addressed is on the income side. You got an inheritance so you quit your job? If it were a few million, sure. It's only $100K. You can burn through that in a couple of years if you have zero income. Go get yourself a freakin' job.
What are the interest rates on cc's, heloc, mortgage, and car note? Does the HELOC have a balloon payment?
One cc is 14.99 with $2500 balance, the other interest free for another month or two then 16.99 and $1600 owed. Heloc, as stated above is 4% and rising as fed does. Car is 3.15%. Mortgage is 6.25, fully paid and then some by the rent, inclusive of taxes and insurance. No balloon on the heloc. I have 20 more years to pay it off but with rising interest rates I don't see the point.
As far as I know, inheritances are tax free except for special cases involving real estate gifting. If it's just a cash inheritance no taxes are due. Put it in a low cost ETF and pretend you never got the money.
Cash in bank accounts may be tax free, but if a person takes any disbursements from an inherited conventional IRA or 401K, those disbursements (some of which are mandatory) are nearly always taxable income - not as an INHERITANCE tax but simply as taxable income. Many people inherit funds that are in such retirement accounts and may not realize that the disbursements are nearly always subject to income taxes.
The OP clarified on another thread that these funds are coming from checking and savings accounts however.
I agree with this strategy. Invest all of it. Don't use any of it to pay off a HELOC or a mortgage. Certainly don't blow it on depreciating assets like cars or outright spend it on consumer items.
The problem that needs to be addressed is on the income side. You got an inheritance so you quit your job? If it were a few million, sure. It's only $100K. You can burn through that in a couple of years if you have zero income. Go get yourself a freakin' job.
Sorry can't take your reply seriously because you clearly haven't fully read my post. My career change was planned over 2 years ago well before my relatives passing and certainly not making any bets on it.
If the funds come from a regular bank account such as savings, checking, or money markets, then they're generally not taxable. This is not the case though, if they are disbursements from a conventional IRA or 401K. Usually in those cases, they are subject to income taxes. I specified INCOME taxes - no mention of estate or inheritance taxes in my question about the source of the funds.
But it doesn't matter because the OP clarified in another thread that these funds come from regular bank accounts.
Stick it in a growth investment account and let it stay there.
Unless of course you have bills that need to be paid. Pay them off first then put most of the remainder of your cash in a investment.
Thank you. I'm trying to get opinions as to what type of investments, so far only one person has addressed this with an ETF. Most others are doing everything but actually answer the question.
How long ago were you here? I have 2 vehicles, the new car with full coverage and my former craft show van at lower coverage. I have accident forgiveness with Geico and a 10 year history with them. They all just keep raising rates in Palm Beach County, supposedly because of all the bad drivers and risk.
well I was in Lake county so that may have made a difference, my parents are still in Seminole Co, 2 cars, 1 accident and paying 1/2 what they paid last year... how?
simple, they were long term Allstate customers and thought that their longevity and loyalty with one company would mean lower rates
then they read an article in Consumer Reports that revealed how insurance companies are very competitive to get new business and they make it up on their long term customers that don't "rate shop" by slowly increasing their rates
well they called 5 companies and all 5 beat their current rates by a wide margin, now their old Allstate agent is mailing then things saying he can meat their current Progressive rates
Don't forget that you will probably have to pay income taxes on this money, so don't spend it all. Put back at least 25 percent of it for taxes if it hasn't already been deducted by the time you receive it.
well I was in Lake county so that may have made a difference, my parents are still in Seminole Co, 2 cars, 1 accident and paying 1/2 what they paid last year... how?
simple, they were long term Allstate customers and thought that their longevity and loyalty with one company would mean lower rates
then they read an article in Consumer Reports that revealed how insurance companies are very competitive to get new business and they make it up on their long term customers that don't "rate shop" by slowly increasing their rates
well they called 5 companies and all 5 beat their current rates by a wide margin, now their old Allstate agent is mailing then things saying he can meat their current Progressive rates
call around, you will be shocked
Yes in those counties rates would definitely be much lower. Even the next county north of me, rates are lower. From Palm Beach to Miami its the heaviest population with the worst drivers, add in seasonals and tourists and its a cluster you-know-what around here. My van was hit 3 times, once in a parking lot where a tourist failed to heed a stop sign, once I was side swiped when someone tried to pass me on the left on a double yellow line, and once on a completely empty but for me and he, 3 lane road, where the other driver suddenly decided to swerve from the far right to the far left, and only the fast application of my brakes kept the accident from being worse, my front fender was scratched with a little dent, the other driver did not stop.
I've called around once before, all rates were higher. Sometimes companies get you in with a low rate, and then jack it up in 6 months too. Lots of scams in Florida.
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