My grandmother died and Im an inheriting some money from her estate and I need to know the answer to this question.
Usually, the inheritance tax is paid by the estate and the beneficiaries receive a net amount.
Inheritances are not subject to income taxes. You should discuss this matter with an estates attorney in TN to confirm these general comments.
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Usually you receive an after-tax amount as an inheritance where the estate has already paid the inheritance taxes, at least at the federal level. Once you receive the money (in most cases, except in the case of an inherited IRA), you do not owe tax on the amount you receive. This is tax free for you for income tax purposes.
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Legal disclaimer: This information is not intended to create an attorney-client relationship and is provided for general informational purposes only pursuant to the Avvo.com community guidelines.
Generally, the inheritance tax (if any) is paid by the estate and not the beneficiary. Check with the executor of the estate to make sure the taxes are paid.
Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.