Inheritance across state lines
June 26, 2010 6:57 AM
I need help with my inheritance in another state...
I have received as an inheritance some of my grandparent's land in another state. It is split up between by four uncles and aunts and my sister, so six people over all. I've never received inheritance before, nor owned land other than my current house. The farm has a manger and will be sending out disbursement checks periodically. With what should I be concerned over the next coming months, especially regarding investments, taxes, attorneys, and other legalities?
I have received as an inheritance some of my grandparent's land in another state. It is split up between by four uncles and aunts and my sister, so six people over all. I've never received inheritance before, nor owned land other than my current house. The farm has a manger and will be sending out disbursement checks periodically. With what should I be concerned over the next coming months, especially regarding investments, taxes, attorneys, and other legalities?
I assume you live in the U.S. (You really need to specify this stuff, people.) I also assume that the land is owned through an LLC or an S corporation, or outright by the new owners. I concur with the suggestion to consult with an accountant.
The manager will send you a report, called a K-1 form, early each year. This is a report to you and to the IRS of what your share (presumably 1/6) is of the income and expenses for the ongoing enterprise. You will have to pay taxes on your share of the net income even if (and this is where it can get tricky) you didn't actually get any of the income.
Many small companies are set up to pay out net income to the owners, but not all do. Most small companies have governing documents that require that at least enough income be paid out to cover the tax liability, but not all do.
These are the things that an accountant advising you can cover, and can knowledgeably discuss with the management.
posted by yclipse at 8:36 AM on June 26, 2010
The manager will send you a report, called a K-1 form, early each year. This is a report to you and to the IRS of what your share (presumably 1/6) is of the income and expenses for the ongoing enterprise. You will have to pay taxes on your share of the net income even if (and this is where it can get tricky) you didn't actually get any of the income.
Many small companies are set up to pay out net income to the owners, but not all do. Most small companies have governing documents that require that at least enough income be paid out to cover the tax liability, but not all do.
These are the things that an accountant advising you can cover, and can knowledgeably discuss with the management.
posted by yclipse at 8:36 AM on June 26, 2010
You need to tell us what country you live in.
Assuming you live in the US you should receive disbursements from the farm; these are taxable.
Regardless of where you live retain the services of a qualified accountant.
posted by dfriedman at 9:01 AM on June 26, 2010
Assuming you live in the US you should receive disbursements from the farm; these are taxable.
Regardless of where you live retain the services of a qualified accountant.
posted by dfriedman at 9:01 AM on June 26, 2010
Yes, I live in the United States in the state of Kentucky and the land is in Iowa. Sorry for not posting that in the original posting.
posted by medarby at 11:51 AM on June 26, 2010
posted by medarby at 11:51 AM on June 26, 2010
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posted by Hiker at 7:08 AM on June 26, 2010