Tax Planning/IRD's


My sister passed away in the summer of 2015, and worked for a Federal Agency. I was listed as beneficiary for some of her unpaid/unused vacation time that had accrued, as well as other death benefits thru said Agency.  I have to date received 3 of these separate payments, one of which arrived before the end of 2015 and as such I have received a 1099-Misc for that particular payment.  Reading information regarding inherited monies on the IRS website, I'm unclear as to whether I am liable for tax on this money.  Where am I to report this on my 1040 form?

Denise - The answer depends on the form that the income takes.  Did you receive a tax reporting document, like a 1099-R?  That would be the case if it was received as the beneficiary of a retirement account that had previously not been taxed.  You stated that you had received a 1099-Misc.  Which box was it reported in?  That will tell a lot about if it is taxable or not.  Death benefits are typically not taxable, but they can be in certain instances.  Your answers will tell whether the funds you received are taxable and where they would be reported.

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As an Enrolled Agent, I am fully capable of providing tax advice as it relates to personal and business income taxes. Enrolled Agents are the only Federally licensed tax practitioners and are admitted to practice before all administrative functions of the IRS. My specialty is working with small business owners who file Schedule "C" and helping them to structure their business in such a way as to maximize as many tax advantages as possible. I also enjoy working with individuals who have both routine as well as complex tax situations. I prefer to concentrate on individuals and small business tax planning.


I have a 25 year background in financial services including tax, bookkeeping, insurance, real estate and securities. I was previously the Chief Financial Officer of a local and national franchise organization. I am currently semi-retired, but used to own (in partnership with another EA) an individual and small business financial engineering firm where I work with nearly 2,500 individuals and small business owners in nearly every state and almost every continent, assisting them in all aspects of their tax and financial well-being. I have prepared or reviewed more than 8,000 tax returns in my career.

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Enrolled Agent, Admitted to Practice Before the IRS, Accredited Tax Preparer, Fellow of National Tax Practice Institute, Certified QuickBooks ProAdvisor (1999-2011), Sleeter Group Certified QuickBooks Consultant, Life & Disability Insurance Agent License (California, Texas, Maine), Real Estate Agent License (California); Many years of continuing education in all these fields.

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