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 (Indiana, Iowa, Kentucky, Maryland, Nebraska, New Jersey, Pennsylvania and Tennessee) have some kind of inheritance tax. If you're preparing a return in those states, we'll ask about your inheritance and figure out if it's taxable.
Having said that, 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?