The estate pays any taxes due before distributions can be made to heirs. You don't need anything to file your taxes. The only time this would not be true, is if any heirs were given more than the $1 million Gift Exclusion limit on tax-free gifts, in total over the lifetime of the donor. Since this didn't apply to your parents' estate, there's nothing to worry about.

Hi Jockewing, Along with the others, my condolences for you & your family with your Grandmother's passing. Some basic rules of thumb for your financial management; A) "Reserves rule" and you want to initially have, at minimum, safe & liquid funds set aside in an account that cannot lose money to the markets, equal to no less than 6 months of your total costs of living (and preferrably 12 months,) B) I suggest your "longterm goal" to be to grow your investments to the eventual point where they can throw off enough passive cashflow (without eating into the principal) to cover 100% of your living expenses. This, of course, is the definition of "Financial Freedom." C) As long as your after-tax interest costs on leverage (loans, mortgage, etc.) remain less than your after-tax average rate of growth on investments, leave the leverage principal alone, and direct every additional discretionary dollar you can into your growth accounts. D) Yes, you will want to build a "risk/reward pyramid" distribution of your newly acquired assets to fit your stage and profile in life (which considers far more than merely your age... but family status & plans, career/educational status & plans, likely longevity (family history,) personal financial attitude, and other factors.) All of this, properly done, will likely require the oversight of a good planner... and even then you're going to see significant differences in planning styles, so its a good idea to take your time to interview various planners (and I suggest from various different "financial cultures." Talk with securities-oriented planners, insurance-oriented planners, legal/tax-oriented planners... get a rounded exposure.) REGARDING YOUR NEW 2nd HOME: Renting it out is more than simply "renting it out." It is more than simply "taking tax-advantaged cashflow" from your held appreciating asset. Doing so is a decision to enter into the business of being a landlord. It is crucial to understand the gravitas of this, as a decision. (Personally I love the business of being a landlord, for so MANY reasons... but as an Advisor myself, I know too many individuals who never realized it is a business, and have financially suffered because of that.) NOW... regarding cleaning up your credit. Contrary to the advice above, DO NOT try to go it via any generic "rules of thumb." You *DEFINITELY* want the guidance of someone who understands how to read the reason codes of your current tri-merge credit report, and translate them into priorities and actions to be applied. The people who can generally guide you on this the best are mortgage brokers (even if you are not going to do a refi.) The "clean your credit" businesses are more often than not a scam. Retail bank loan officers generally don't know or care about the intricacies of credit improvement. CFPs, CPAs, Attorneys, etc. are virtually *always* clueless about how the credit bureaus report their specifics, and how to use the reports as an action plan. Your standard individual Mortgage Broker will be far more likely to dig in & help you work through your plan (even if it takes 2, 3, even 6 months) to get your credit in shape to get a great refinance... and they'll usually do it for no charge (just your honor of doing your refinance with them when (and if) you actually refinance.) Kind of a service "loss leader" for them. To recap; RESERVES RULE! Everything else *AFTER* you've locked-out sufficient reserves. SAFETY FIRST! Get the "guaranteed money" foundation of your risk/reward pyramid in place #1. SHOP PROFESSIONALS (not investments.) Be sure to shop differing "financial cultures." Hope that's helpful! Dave Donhoff Leverage Planner

Greetings again Anne, How great it is that your aunt remembered you in her will. If there are taxes due relative to the estate, that'll be the business of the estate to take care of. When you receive money from an inheritance here, it is not taxable: I received thousands from my Dad's estate in the late '80s and I didn't have to pay a cent of tax on that income. When I invested some of it, it had become part of my assets and I had to declare the income that it produced, year by year, along with whatever other income I received. If you invest it wisely and it earns you $300. next year, you'll have to declare the income that it produces, $300. in the year that it's produced. Enjoy the addition to your income. If the income isn't to go on for many years, I have a suggestion which may be of interest. As it's more or less found money, unexpected, probably a good idea to spend one month's income from the estate in the first year and save and invest the second month's, when you haven't got really used to receiving it, yet. If you can afford it, continue that plan for another year or so. Then, for a time, spend two months' income and save and invest the third month's income. Then spend three months' worth, investing the fourth, for a year or so, as is convenient. If you can save 6 months' worth for a couple of years, then 4 months' for a couple of years, then 3 months' worth for a couple of years, followed by 2 months' worth for a couple of years if you can, and one month's worth for a couple of years ... after 10 years, you'd have saved $3,200.00, and if you could invest it at 8%, paying 2% in tax and allowing 2% for loss of value due to inflation, you'd have about $4,000. (more or less equivalent to today's dollars) in that investment account. If you chose to invest one or two of those monthly amounts per year as time went on, after while you'd have a substantial amount on hand. After several years, when the monthly bequest ceases, you'll have an asset that will produce some income to at least partially replace the bequest that isn't available any more. In the meantime, it's a nice addition to one's emergency fund, available when some unexpected expense comes along. In which case, one needs to make an earnest effort to replace the funds that were used for the emergency, if one feels that one may likely need that fund intact to produce an addition to ongoing income, later. Even if you expect the bequest to continue for many years, the plan that I've suggested may be a good idea, especially if you lack much of an emergency fund at present, for it's always useful to have some funds on hand to take care of an emergency without sweating blood when one comes up. Good wishes to you for the weeks ahead. ole joyful

In my area the property owners taxes lock upon reaching retirement age and the school district taxes are removed from the appraisal list when tallying the total tax due. I experienced a similar situation with my Grandmothers house. The county overvalued her older home due to square footage based on the sale price per square for homes in her area. What were once large tracts of farm/ranch land with farm houses out in the country 40 miles from Houston ended up becoming subdivided neighborhoods and what were once nice homes on smaller tracts of land became McMansions after bulldozing the original home. The property taxes quadrupled after her passing. I was forced to raise the rent so high on a tenant of 10+ years that they bailed. If we had a break in the taxation we could have kept the place in the family. Unfortunately we couldn't and had to sell. It was heartbreaking. What we found out was that the county undervalued the land and way overvalued the home. I'm not calling anyone here right or wrong. But, it would have been unfair to her new neighbors if I'd of kept MeMa's place at her taxes which were locked in in the mid 70's. Having said that, I can assure you that if I could have got the break I'd of taken full advantage of it regardless of how it affected everyone else. After all it's LAW regardless of how fair/unfair it may be to other property owners. Good Luck with your situation. See ya, Kelly