If your loved one recently died, you may be concerned about probate, trust settlement and other issues. Among those includes tax issues - both estate taxes and income taxes. On income taxes, the receipt of an inheritance is not income to the beneficiary. Our income tax system is based solely upon working for your income. An inheritance is not something that you worked for, so the receipt of an inheritance is not taxed to you as income.
One possible exception to this rule is the receipt of an IRA or an Annuity. Once monies are removed from an IRA or an annuity, there may be taxable consequences to the beneficiary as the assets have likely appreciated in value.
The likely tax return that an heir should be concerned with is the estate tax, but an estate tax only applies if the decedent's estate is worth more than $11.20 million (2018). Most people do not need to worry about this as most estates, by far, are below level.
If you want to learn more about probate and the probate process, feel free to download our Free Guide to Navigating the Florida Probate Process.
