Taxes 101

Gifts and Inheritance

Property received as a gift retains the basis of the donor. 

Inherited property receives a stepped-up basis to the fair market value (FMV) of the property on the date of the decedent's death.

Certain inherited property, such as IRAs and pensions, are taxable or have a portion that is taxable when distributed to the beneficiary.

In 2014, an individual can give up to $14,000 (money or property) during the year to any other individual tax-free.  The person receiving the money or property does not have to report the gift as income. For any amount over $14,000 given to a single individual, the donor must file a gift tax return and any gift tax is the donor’s responsibility