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Thank you for using justanswer.The trustee or executor will have paid the federal and any state/local estate taxes, if any, as part of the administration process. So the bulk of the estate (inheritance) that you receive will be tax free to you.
If, during the time between the date of death and the time you received the inheritance, the estate earned interest/dividends, etc, then you will receive a K1 reporting form showing your share of that income between those 2 time frames. Normally, this is not alot of money, and is certainly significantly less than the inheritance itself. If there was no interest/dividends, etc earned, then there will be no money to report. (Normally though, people have the money invested in some type of money making account. You will want to check with the administrator to see if there will be any K1's issued)
This is a direct quote from IRS Publication 950 (8/2007), Introduction to Estate and Gift Taxes
No tax payable by the person receiving your gift or estate. The person who receives your gift or your estate will not have to pay any federal gift tax or estate tax because of it. Also, that person will not have to pay income tax on the value of the gift or inheritance received.
I hope this helps
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