It seems like the CD was held in joint ownership. So on death of the deceased- you are inheriting 50% of the value of the CD.
However, US does not have an inheritance tax. Some States do have inheritance tax and the tax rate depends on your relation to the decedent in some States.
Which State was the decedent a resident of?
Let me know if you have any question.
Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.
Did you own the account or was it owned by the decedent? Did both of you have equal access to the account?
Under the Inheritance Tax law, the account will be considered jointly owned if you and the decedent had equal access to the account. Therefore, in this example the survivor is taxed on one-half of the amount in the account. The balance 50% will not be subject to any inheritance tax.
No, the remaining 50% does not become part of the estate. You own the 50% and the remaining 50% is inherited by you on death of the decedent. So in essence, you own 100% of the CD now.