Do I need to report a cash inheritance?
Not on your federal return. The IRS doesn't impose an inheritance tax.
Only a handful of states (Iowa, Kentucky, Maryland, Nebraska, New Jersey, Pennsylvania and Tennessee) 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.
- Do I need to report inherited property or land?
- Is an inherited IRA or retirement plan taxable?
- Do I need to report life insurance?