Was any of the inheritance proceeds from a 401k plan, annuity or an IRA?
Thanks for your question.
There is no Washington state inheritance or income taxes, so it is non-taxable for the state. The state estate tax exclusion for 2009 is $2,000,000, so no worries there either.
As long as the money was not from a cashed-in traditional IRA or 401k plan (that contained pre-taxable amounts) , it will not be taxable to you on the federal level either. Traditional IRA and 401k plans usually have never had their contributions/earnings taxed or the owner took a tax deduction, so this is why it could be taxable if it were from one of these sources.
Hope this helps,