Estate tax on annuity

[D2]

I am the executor for my deceased Aunt. I set up an estate bank account and sold the home and all her property. All monies were placed in the bank account. There was also an annuity. I cashed it out, and placed proceeds in the bank account. The Financial company automatically withheld federal income tax. Should I pass the tax owed on annuity to the beneficaries? Can the estate get a refund on taxes paid?"

[Carl]

Since for the most part an inheritance is not taxable on any tax return, (Yes, there are exceptions), the estate must file it's own 1041 estate tax return and pay any and all taxes due. Then what remains is distributed to the heirs so as to liquidate and dissolve the estate. What the heirs receive is not taxable or reportable on their own tax returns.

[shleslie]

So, if the inheritance is not taxable or reportable, is the monthly annuity taxable?