My mother died. I was a designated beneficiary of a bank account,

Hello windcatcher,

You will not owe any taxes on the amounts you received as an inheritance from your mother, except for possibly a portion of the annuity.

The annuity is similar to a CD in the respect that your mother would have originally purchased that annuity with tax paid dollars, and then the annuity continues to earn interest on a tax free basis until the annuity is cashed in. If you cashed in the annuity, then the interest that the annuity earned would be taxable to you. The company who held the annuity should send you a 1099-R form that shows the taxable portion of the interest, and you would include that on your return as interest income on Schedule B.

The life insurance is not taxable, and the CD that was in your name is XXXXX XXXXX The money that was held in regular bank accounts is not taxable, but if those bank accounts earned any interest since the time your mother died, then you again would pay tax on that interest income and report it on Schedule B of your tax return. The bank should have sent you a 1099 form to report any interest that the accounts earned.

Thank you windcatcher

Hello again windcatcher,

The 1099-R that you received should show the taxable amount in box 2. Assuming that it does, then you would report this amount on lines 16a and 16b of your form 1040, and that amount will be included in your taxable income for the year.

Thank you windcatcher