@deonthego
Even if a child is the only beneficiary of an estate in Kentucky, there are still several reporting requirements that have to be completed. The specific requirements will depend on the estate's total value, but they will generally include filing an inventory of assets with the court and ensuring the child's inheritance is properly managed. It sounds like the Probate Attorney has handled that part for you.
As far as Tax Reporting goes, children are considered Class A beneficiaries and are fully exempt from Kentucky inheritance tax. If a child is the only beneficiary, no inheritance tax return is required and the personal representative would file an Affidavit of Exemption with the court to finalize the estate. I would suggest you confirm that the Probate Attorney did this for you.
For Federal tax filing, Form 706 an Estate Tax return is only required if the gross value of the estate exceeds the federal exemption amount. The federal exemption amount in 2024 was $13.61 million per individual and in 2025 is $13.99 million.
If the estate prior to being closed generates over $600 in annual gross income, the personal representative must file a federal estate/trust return Form 1041. A state fiduciary income tax return (Form 741) may also be required, though Kentucky taxes only the portion of the estate's income that is not distributed to beneficiaries.
If you inherit cash, you do not need to report the amount on your tax return, however, if you put the money in an interest-bearing account, the interest earned is taxable. You would report this interest just like you would any other interest you receive not relating to the estate.
Inheriting property (such as a house) itself is not taxable, but when you sell it, your cost basis for the property is "stepped-up" to its fair market value on the date of death which can reduce any capital gains tax resulting from the sale.
Inherited retirement accounts (IRA, 401(k)) are taxable to you in the year you receive them if you are a non-spouse beneficiary.
Inherited stocks, bonds or mutual funds are similar to real estate, the value of the stock on the date of death is your cost basis. You would only owe tax on any appreciation (increase in value) from the date of death to the date you sell. Any dividends or interest earned after the date of death are also taxable.
Helpful links:
If you need to file an estate return:
Which TurboTax do I need to file a return for an estate?
How do I file Form 1041 for an estate or trust?
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