Is inheritance from great grandmother taxable?

Question

Great grandmother left me $10,000; so is that a taxable inheritance? Someone told me it's not b/c i'm a direct decendant.

Answer 1

Inheritances are never taxable to the person who receives them. Any taxes would have been paid by the estate before the inheritor recieves the inheritance. The only state that I am aware of that taxes an inheritance is Pennsylvania. The only other way that the $10,000 would be taxable was if it was a regular IRA. In that case you would have to take distributions of it over time, and the distributions would be taxable to you. But if it's $10,000 in cash that you received, then only if you lived in Pennsylvania would the inheritance be taxable to you on the state income tax.

Answer 2

Any thing you receive as gift or inherit, you don't pay any taxes on it. So this is non taxable income.

Answer 3

At the federal level, probably not, but it depends on the total size of her estate. If it's over $2 million, there would be federal tax, but the estate would pay it.

At the state level, depends on where you live.