Ask Terry Questions Taxes on received unclaimed property

Taxes on received unclaimed property

By Terry Savage on February 03, 2023 | Wild Card

My wife received a large “payment for unclaimed property” from the State of Illinois. (I suspect the “property” is something from the Estate of my mother-in-law). Assuming the worst, I’ve been searching IRS and Illinois
publications to see if the money is taxable (and if so, what form would I use to declare the amount) but I can’t find anything. Do you know whether it’s taxable? If so, how would I report it? As always, thanks for your help!!!

Terry Says

First, confirm that this is not a scam by using this service at the Illinois State Treasurer’s office:
https://icash.illinoistreasurer.gov/

I can’t give you a tax answer, but I suspect that if it was part of an estate, and the estate was under $4 million (the limit for Illinois estate taxes), there would be no tax due. On the other hand, it could be something else — perhaps shares that were sold, and there might be both a Federal and state tax liability.

You might as well go ahead and claim it. When you know what it is, a tax advisor can guide you to potential taxes. Either way, you’ll be money ahead!

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