Inheriting money from a trust isn't federally taxable unless the estate exceeds $13 million, which the estate pays before you get it. But if the trust generates interest or income, you owe tax on that. Some states tax inheritances too.
If you inherit money from a trust, do you have to pay taxes on it? Well, there are a lot of issues that go into this answer, but generally speaking, if you inherit money or property from a trust, you will not have to pay any tax on it. You don't even have to report your inheritance to the IRS unless it was above the federal estate tax exemption, which as of today is over $13 million. And that tax, if it was due, should be paid, should have been paid by the estate before the money got to you. Some states do still have estate and inheritance tax, and I'm not addressing those right now. Now, if you're the beneficiary of an existing trust and you get earned interest from that trust, then yes, that would be income to you and you'd have to pay income tax on it. Now, this can be a complicated subject based on the trust and who you are within the trust. So work with somebody who's qualified to answer these questions. If you want to work with me, go to my profile link and sign up for an appointment or my newsletter. But at the federal
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