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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29580
Experience:  Taxes, Immigration, Labor Relations
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My grandmother died last month, and she left me a CD for

Customer Question

My grandmother died last month, and she left me a CD for $25,000 that I intend to collect. Is this taxable income to me? Is there an exemption? I file married filing jointly. Is there any tax liability to her estate?
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

Hi and welcome to our site!

For INCOME tax purposes inheritance is not taxable income in the US regardless the amount - as a recipient of inheritance you do not need to claim it as income.

There is no any amount limit.

Please see for reference IRS publication 525 -

Gifts and inheritances. In most cases, property you receive as a gift, bequest, or inheritance is not included in your income. However, if property you receive this way later produces income such as interest, dividends, or rents, that income is taxable to you....

Expert:  Lev replied 1 year ago.

The only taxable income would be interest credited to that CD.
Interest credited before her death is reported on the decedent's final tax return.

But the interest credited AFTER her death - will be reported as taxable income either fore her estate or for you as a beneficiary.

The principal of that CD is not taxable and is not reported on any income tax return.

Any questions?