Checklist
The first year after an inheritance: what to gather and by when
If a parent or a spouse passed away this year and left you a retirement account or a house, this list covers the tax side of the first year, starting with the parts that run on a date.
Two terms the list uses
The start date is the day an IRA owner had to begin yearly withdrawals, which the IRS calls the required beginning date. It is April 1 of the year after the owner reached age 73 (age 75 for an owner born in 1960 or later).
A favored beneficiary, which the IRS calls an eligible designated beneficiary, is the owner's spouse, the owner's minor child, a disabled or chronically ill person, or anyone not more than 10 years younger than the owner. A child stops counting as a minor at age 21. Everyone else who inherits as an individual follows the stricter rows below. A favored beneficiary's own withdrawal rules aren't in this list.
The dates
Cross off the rows that aren't yours. Each one says who it applies to.
| When | What happens | Who it applies to |
|---|---|---|
| The year the owner passed away | If the owner hadn't taken that year's full required withdrawal, the beneficiaries take the rest. The 25% excise tax on a late one is waived automatically when you take it by the due date of your own return for that year, extensions included, or by the end of the following calendar year if that is later. | Beneficiaries of an owner who had reached the start date |
| September 30 of the year after | The IRS generally settles who the designated beneficiary is on this date. Someone who disclaims before it isn't counted. | Every inherited IRA |
| December 31 of the year after, then each year | A withdrawal is due every year, starting the year after the death. | An individual who isn't a favored beneficiary, when the owner had reached the start date |
| December 31 of the year that holds the tenth anniversary of the death | Under the 10-year rule the whole account has to be out by this date. | An individual who isn't a favored beneficiary |
| The end of the year the owner would have reached the start date | No yearly withdrawal is required before then. | A spouse who is the sole beneficiary of an owner who passed away before the start date |
| After a missed yearly withdrawal | The excise tax is 25% of the amount not taken. It falls to 10% if you take the amount and file a return showing the tax within the correction window. The window closes at the earliest of three events: the IRS mails a notice of deficiency, the tax is assessed, or the second tax year after the miss ends. Form 5329 goes with the return for the year of the miss. | Anyone who missed one |
| When | What happens | Who it applies to |
|---|---|---|
| When the will is presented for probate | Virginia's probate tax is paid. It is 10 cents for every $100 of the estate's Virginia probate value once the estate is over $15,000, figured on the whole value including the first $15,000, and a county or city may add one third of the state tax. | Estates that go through probate |
| Any time, including the first year | An inherited house sold within 1 year of the death is treated as held for more than 1 year, so the holding period is no reason to wait a year before selling. | Heirs who sell |
| Two years after a spouse's passing | A surviving spouse can still exclude up to $500,000 of gain on a sale within this window. The conditions are that the spouse hasn't remarried, meets the 2-year ownership and residence tests, and neither spouse excluded gain on another home sold less than 2 years before. | A surviving spouse |
| When title transfers at a sale | The seller registers with Virginia Tax on Form R-5, which the closing agent collects. Virginia doesn't withhold tax at the closing. The gain is Virginia income, reported on Form 763 when the seller's Virginia adjusted gross income is at or above the filing threshold. | An heir who lives outside Virginia |
What to gather for the retirement account
- The date of death and the owner's date of birth. Together they show whether the owner had reached the start date.
- The beneficiary form. Find who is named, each person's relationship to the owner and each person's date of birth. Those facts, along with any disability or chronic illness, decide who is a favored beneficiary.
- The custodian's record of what the owner withdrew in the year they passed away. It shows whether any of that year's required amount is left for the beneficiaries to take.
- Whether the account is a traditional IRA or a Roth IRA. For a Roth, find the first tax year the owner put money into any Roth IRA. A 5-year period that starts with that year decides whether a withdrawal comes out tax-free.
- The owner's Form 8606 history. If the owner ever made contributions they couldn't deduct, that basis stays with the IRA, and it makes part of each withdrawal nontaxable.
- How the inherited account is titled. A beneficiary who isn't the spouse can't treat the account as their own or roll it into their own IRA. It can move by a trustee-to-trustee transfer into an IRA kept in the late owner's name for your benefit.
- Whether the estate filed a federal estate tax return. If it did, a beneficiary can deduct the estate tax paid on the part of a withdrawal that was the owner's untaxed income. The executor's Schedule A (Form 8971) generally doesn't cover an inherited traditional IRA unless the owner had basis in it.
- An estimate of your own income for this year and next. A taxable withdrawal from a traditional IRA is added to your income on the federal return, and Virginia starts from the federal figure.
What to gather for the house
- The house's value on the date of death. That value is generally your basis, the starting figure for measuring a gain or a loss when you sell. Ask the executor whether the estate chose the alternate valuation date, because then the value on that date is used.
- The deed. It shows how title was held. For a house owned jointly by spouses, half the value is treated as the late spouse's, and the survivor's own half keeps its old basis. For joint owners who weren't married, only the late owner's share gets a new basis.
- The closing statement from a sale. The gain or loss is the selling price, minus the selling expenses, minus your basis.
- How the house was used after the death and on which dates. A loss on a house held for personal use isn't deductible. A loss on an inherited house that was never used personally and was put up for sale generally is.
- A surviving spouse's dates of owning and living in the home. The exclusion for a home sale asks for 24 months of ownership and use in the previous 5 years, and you may count the time your late spouse owned and lived there.
- A rough total of what the person owned. For someone who passed away in 2026, the federal estate tax exclusion is $15,000,000. Virginia has no estate tax or inheritance tax on deaths today.
Who does which part
An inheritance usually has three professionals around it, and it helps to know which question goes to whom.
- The estate's attorney advises the executor on the executor's duties, the probate filings and anything about a will or a trust.
- A financial advisor helps you decide how fast to take money out of an inherited account and where it goes next.
- A CPA works out what is taxed, in which year and on which return, for the IRS and for Virginia.
- Sources: IRS Publication 590-B (2025), Publication 551 and Publication 523; T.D. 10001; 26 U.S.C. 1223 and 4974; IR-2025-103; Code of Virginia 58.1-317, 58.1-1712 and 58.1-1718; the 2025 instructions for Virginia Form 763; Virginia Tax's pages on the probate tax, estate and inheritance taxes and nonresident property owners.
This list is general information, current as of November 2026. It isn't advice for your situation, and it leaves out rules that apply to trusts and estates named as beneficiaries.
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