Gifts Received

Are gifts, bequests, or inheritances taxable? 

Generally, property you receive as a gift, bequest, or inheritance is not included in your income. However, if property you receive this way later produces income such as interest, dividends, or rentals, that income is taxable to you. For additional information, refer to Publication 17 (PDF), Your Federal Income Tax, Chapter 13. If you inherit an Individual Retirement Arrangement (IRA) or proceeds from a retirement (pension) plan, special rules apply. Refer to Publication 590 (PDF), Individual Retirement Arrangements (IRAs), or Publication 575 (PDF), Pension and Annuity Income, for further information.