Discuss various money matters here. Loans (federal and private), scholarships, lottery winnings, or other school finance related information and queries.
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- Tiago Splitter
- Posts: 17158
- Joined: Tue Jun 28, 2011 1:20 am
kappycaft1 wrote:I was wondering if anyone here knows how large inheritances are treated under repayment plans like IBR and PAYE. Under these plans, debtors are expected to pay 15% (IBR) or 10% (PAYE) of their "adjusted gross income" (minus the poverty guideline based on state and family size), but would an inheritance be treated as "income" that one would be expected to pay 10% of?
The Federal Student Aid website defines AGI as "your or your family's wages, salaries, interest, dividends, etc., minus certain deductions from income as reported on a federal income tax return." The PAYE calculator recommends that users look to their tax returns (Line 4 on Form 1040EZ, Line 21 on Form 1040A, Line 37 on Form 1040) for an "estimate" of one's AGI, so I am not sure if it is 100% accurate as it is just an estimation. Any advice from those of you who are familiar with this sort of thing would be greatly appreciated.
Estate tax gets paid by the estate, not the person receiving the inheritance. It doesn't count towards AGI, so I doubt it matters for PAYE/IBR purposes.
Also, the Menendez brothers didn't get away with it dude.