Do i need to pay inheritance tax?
As a general rule, the tax rate on inherited property, including money, is nothing…not a penny, you don’t even have to report the event on your tax return. However, once you own the property, any income earned on it becomes taxable. One notable exception to this tax-free rule is the inheritance of an Individual Retirement Account (IRA). The IRS handles each type of IRA differently. You generally don’t pay tax on inherited property, because any tax that’s due is paid out of the decedent’s estate before the property is distributed. The estate tax, also known as the ‘death tax,’ adds insult to the injury of dying, depending on when you die and how much you leave behind, the insult can go as high as 55 percent.
