According to the IRS inheritances are not taxable.
States with an inheritance tax
The federal government does not have an inheritance tax. The six states that impose an inheritance tax include Iowa, Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania. Of course, state laws are subject to change, so if you are receiving an inheritance, check with your state's tax agency. The tax rates on inheritances can be as low as 1 percent or as high as 20 percent of the value of property and cash you inherit.
****I would recommend that you contact the Iowa department of Revenue for complete information on which forms you may need to complete. You may not have to pay any taxes on it according to the current Iowa tax rates below
Calls regarding proper filing of the IA 706
may be directed to Taxpayer Services at:
515-281-3114 or 800-367-3388
Pursuant to Iowa
Code chapter 450 the tax rates are as follows:
-If the net estate
of the decedent, found on line 5 of IA 706, is less than $25,000, the tax is
zero.
Even if no tax is
due, a return may still be required to be filed. See IA 706 instructions.
-For deaths on or
after January 1, 1988, the surviving spouse’s share is not subject to tax.
-For deaths on or
after July 1, 1997, no tax is due on the following shares: Parents,
grandparents,
great-grandparents, children, stepchildren, grandchildren, great-grandchildren,
and other lineal
ascendants and lineal descendants.
-Effective July 1,
2003, a stepchild is the child of a person who was married to the decedent at
the time of the
decedent’s death, or the child of a person to whom the decedent was married,
which person died
during the marriage to the decedent, as defined in Iowa Code section
450.1(1)(e).
https://tax.iowa.gov/sites/files/idr/forms1/Rate%20Sch%20%2860061%29_1.pdf
