An inheritance is a property received from a decedent. If the property is received before a donor dies, it is a gift.
If you received cash, then it is not taxable. The rule is, if it had been taxable in the hands of the decedent, then it is taxable to you. If you inherited the CD and then cashed it out, it is taxable, the same way it would have been taxable to the decedent.
Please see this LINK for more information.
