No, you do not.
You do not need to report your inheritance on your state or federal income tax return because an inheritance is not considered taxable income. However, if you generate profit or income from the inherited property such as interest, dividends, or rents, you might need to report to pay taxes.
If I received an inheritance that made income, but the income was made by the deceased party, not me, do I need to include it on my income tax. I received a 1099R form that shows a Gross Distribution and a Taxable Income amount.
An inheritance will be taxable if you inherit an IRA, 401(k), or other retirement account and receive a distribution.
That would be considered "income in respect of a decedent" which is earned by a deceased person prior to death. Because it was paid after death the income is taxable to the recipient in the year paid. Withdrawals from the IRA are subject to the same taxes associated with the account. If it's a traditional IRA, then your withdrawals will be subject to taxes.
You would report the inherited income based on the form it takes. Inherited retirement is reported as 1099-R (retirement section), while inherited property sold is reported in the Investment section.
See the steps below: