I have two questions relating to receiving inheritances - tax related, and advice on what you think I should do.
Background: My mom's mom passed away last month. I was left $10k in her will and currently have a check from her account waiting to be deposited. Dad's mom passed away a few months ago, and her estate is much more complicated. In general, I am not listed in her will, but my parents have decided to gift me $10k from her estate once it's settled (part of my father's inheritance). That may not happen until 2016, but my parents are hoping to have everything settled before the end of the year.
Taxes: Technically the second 'inheritance' is a gift from my parents (it will be coming out of my dad's checking account once it happens), and since it's below the max gift cap, it's not taxable, correct? As for the first one, it is an inheritance. I live in New York State, which to my knowledge does not have an inheritance tax. Does this mean this is also not taxable?
$20k is a lot of money! I'm fairly young so my accounts haven't had time to grow. I just opened up a Roth IRA this year have have contributed $1700 so far. If I stick to my budget, I still won't be able to max it this year (estimating I'll hit $4200 by year end). I'm also planning on purchasing a co-op in my area in the next 2-3 years for hopefully ~$175k (meaning I need to save $35k-$40k). Mortgage+maintenance is stupidly lower than rent in this area, plus it could be a good rental in the future.
This inheritance puts me halfway towards my goal (hence why I can buy in 2-3 years instead of 5-6). I can typically save $500-$600 a month to put towards retirement/down payment. I'm just trying to figure out the best way to do both. My company is very generous when it comes to year end bonuses (paid in January) as well as giving decent salary bumps. I also got a decent tax return this year (facepunch, I know) and haven't changed any information, so I assume I'll get one again next year.
Other random notes: I just finished paying off student loans a few months ago ($20k in 2.5 years! Woohoo!), which is why I don't have more in my Roth IRA or saved for a down payment. I have $5500 in an efund and contribute to my 401k.
So... taxes? And what would you do with this inheritance?