Income tax on recovered unclaimed property
Are funds received from an out of State Treasurer for unclaimed property (10 to 12 year old stream of dividends) of a deceased relative, considered current taxable income to me? The relative is deceased at least 15 years.
Terry Says
That will depend on whether the state treasurer sends you a 1099 form next January! Did you give them your SS number? If so, it’s likely that you’ll get a 1099 to include this in your income.
If you had inherited stock — not a stream of dividends — then the gain on sale of the stock would be a capital gain. So a portion of that money, if they sold the stock to send you the money, might be a capital gain and taxed at a lower rate.
And the capital gain would be calculated not on the total value of the stock, but on any increase in value since the date of death. If that’s the case, they may not have differentiated between the two on the 1099 you receive. It may all be sent as ordinary income. But you’ll have to wait and see if it’s worth disputing that.
