If you’ve recently inherited a little money from a deceased relative, please accept our condolences. Then accept our advice, which might help you navigate this tricky area without ending up in the IRS penalty box and/or screwing yourself later on down the road.

Special thanks due to Allen DeLeon, CPA, PFS of DeLeon and Stang, who gave me good advice when I found myself in this situation with no clue how to handle it and some pointers for this article. If you are in Maryland and need an expert to help with your inheritance (Fluffy Mattress, CPA is not taking on new clients at this time), hit up the firm and they’ll be happy to help. The following is not presented as tax advice and is not meant as a substitute for a professional assessment of your personal situation.

First, you might be a CPA but that doesn’t mean you are an expert in personal financial planning, estate rules and tax law. So unless you happen to be a partner with 20 years experience handling inherited IRAs and pension plans, find yourself a qualified CPA from whom you can get a little advice. Maybe there is a partner in your office who you trust that knows a thing or two about this area but absent that, check with your state society of CPAs to see if they have a recommendation. It shouldn’t be hard to find someone in your state.

Second, get any real estate or other property valued and save all documentation. You aren’t taxed on the receipt of property, so if your grandma leaves you her house, you don’t have $200,000 in income to claim but you will have a gain (or loss) to report later (should you sell this property) that is based on its value at the time of the owner’s death. If you end up never valuing it and renting it out for a decade and then want to sell it, you’ll be ass out if you don’t have a baseline value. This goes for stocks too but you should have no problem figuring out what those are worth.

On the federal level, the only initial tax you have to worry about is on inherited IRAs and pension plans, which are taxed as income (meaning at your normal tax rate – be wary of a large sum changing your tax bracket). If you cash these out, you can elect to have the tax withheld or pay it directly to the IRS yourself after distribution but keep in mind there could be penalties associated with that option.

Currently, most inheritance is not subject to income tax. The second Congress reads this article, however, that could change so again, talk to someone who actually knows the rules and keeps us with any changes if you are at all unsure how to proceed.

Good luck!