Although the general rule is that inheritances are not taxable; retirement plans, including IRAs, 401ks and annuities are an exception. Since retirement plans are funded, or partially funded, with pretax money, they are taxable or partially taxable when distributed to a beneficiary. The 1099-R will tell you what the taxable amount is. See
http://www.investopedia.com/ask/answers/09/inherited-annuity-distribution.asp
