Hi Catmom5! Thanks for participating in our event today. This is a fantastic question. This situation can be stressful and confusing for so many people.
As others have mentioned, there is no federal inheritance tax, as inheritance is not considered taxable income for federal tax purposes. Additionally, only 6 states currently have an inheritance tax and NY is not one of them. So you are safe from inheritance taxes in this scenario. As far as estate tax, that wouldn't be your responsibility. The difference between estate and inheritance tax, is that the estate tax would be paid by the estate prior to assets being distributed to beneficiaries, while an inheritance tax is paid by the recipient of the inheritance bequest.
However, while there is no direct inheritance tax, there may still be tax implications depending on what you inherited. Are the assets in a trust? Did you receive cash? If so, will it be earning interest in a savings or investment account? That interest would be taxable. Did you inherit only cash, or did you also receive stocks, bonds, or mutual funds? If so, you need to consider if and when you will sell them, as any gains would be taxable. Sometimes an inheritance can include retirement accounts. Those have specific rules that may require you to take the funds out and pay taxes on them.
Here is an article that gives a good start to understanding the implications of your inheritance. TurboTax Inheritance If you aren't sure you understand your situation, you may also consider consulting a cpa, financial planner, or estate attorney.
