2555s Interest Earned

I work overseas and currently filing form 2555.  My wife lives with me and doesn't work.  She recently inherited money, from her dad (overseas) who is not a US citizen (less than  $100K).  

1) Is the inherited money taxable? 

2) She now earns interest on the inherited money.  We file jointly.  Can I file a separate 2555-S form to her to deduct the earned interest?  

Thanks