I inherited 25,000 dollars last year from a friends death i'm not sure what to do can anyone please help?

[HelenaC · Accepted solution]

If you're asking if you pay federal income taxes on it, the answer is no.The IRS doesn't impose an inheritance tax.

Only a handful of states (Iowa, Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania) have some kind of inheritance tax. Refer to your state's Department of Revenue to see what the requirements are for filing inheritance tax.

• Interest or other income generated from inherited cash would be taxable.

For example, if you inherited $10,000 in cash and deposited it into a bank account, generating $40 of interest in 2018, the $40 would be included in your income as taxable interest.

Related Information:

• Do I need to report inherited property or land?
• Is an inherited IRA or retirement plan taxable?
• Do I need to report life insurance?
• 4 Ways to Protect Your Inheritance from Taxes