Does money received from a maturing CD from my father qualify as Inheritance? What is the definition of an "Inheritance"?

Forum|Forum|4 years ago
February 9, 2022
3 replies
6 views

I received $69k from a Maturing CD in January, 2021. I need to know how to report it, if at all, on my taxes.

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Bsch4477

Level 15

If you received it because he left it to you in his will or part of probate it’s an inheritance. An inheritance is not reported or taxed.

ColeenD3

Level 15

An inheritance is a property received from a decedent. If the property is received before a donor dies, it is a gift.

If you received cash, then it is not taxable. The rule is, if it had been taxable in the hands of the decedent, then it is taxable to you. If you inherited the CD and then cashed it out, it is taxable, the same way it would have been taxable to the decedent.

Please see this LINK for more information.

Critter-3

Level 15

You inherited the CD which is a non taxable event BUT then it was cashed in so only the INTEREST that was earned and paid out is taxable to you just like it would have been taxable to the decedent.

carriep1978

Level 2

Good evening,

I have a similar question. When my mom passed we were listed as beneficiaries on her CD, the CDs were cashed out. We all received a cash pay out. How do I report that on my taxes? I only have a check stub showing the amount I received. I do not know about any interest or if it was a matured.

DavidD66

Level 15

@carriep1978 An inheritance is assets one might receive from someone when they pass away. It can include such things as:

Cash
investment assets such as stocks or bonds
Real property, including land and real estate
items such as jewelry, furniture, collectibles, and family heirlooms

Inheritances are not considered income for federal tax purposes, whether you inherit cash, investments or property. However, any subsequent earnings on the inherited assets are taxable, unless it comes from a tax-free source.

So, unless there was additional interest earned after your mother passed away, that was distributed to you, you don't need to do anything tax wise.

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Herman71

Level 2

So my mother passed away in October, 2022. She had CD's that were designated as Paid on Death and I cashed in the CD's in December, 2022. It appears that the interest that accrued from October to December becomes taxable. So I assume this taxable interest is reportable in the 2022 tax year; is this correct? What Federal tax form do I use to report this interest? Thank you