Is the distribution of cash from an estate or trust taxable?

Question

A decendants trust testamentary distribution is what is involved.

Answer 1

if you are a child or grandchild, then most if not all of the distribution to you will be tax exempt. Each state is different, but the fed limit is 2 million I believe.

Answer 2

If the money was in a bank account earning interest, there may be some interest income to the estate. The estate can pay the tax (withholding it from the distribution) or it can pass the income along to you.

Answer 3

The assets will be includable in the deceased gross estate for federal estate tax purposes, however not to heir under a testamentary distribution.

Answer 4

Distribution of assets may be taxable as an estate or inheritance tax, if the amount is over $2,000,000. All distributable income is taxable as income tax to the individual.