My husband inherited a loan that his brother had sold a house and now he is getting the payments.

[bmwith19dogs]

My brother in law had sold his house. Two payment were received before he died. They were deposited into his checking account. But my husband has gotten all the payments since he died.

[IsabellaG · Accepted solution]

Your husband would report as income only the interest portion of the payments received in 2016. Inheritances are not taxable to the heir (the balance of the loan) but any income earned on the inheritance is taxable (the interest).