Airline Pilot Forums

I am looking for input from anyone who has ever had to deal with an inheritance...

Here is my situation. My grandfather passed away, and left me some money (about $25,000.) I have looked, albeit superficially, at my state tax law. It appears that this money is tax free, due to my relationship to the deceased and the amount of the inheritance. I am a resident of Indiana, and my grandfather was a resident, at his time of death, of Ohio. Ohio's state law, again superficially, seems to have a similar exemption up to a dollar amount far in excess of what I stand to inherit.

My first question: is anyone aware of any law that would force me to pay tax on the inheritance due to the fact that I am receiving the money from an estate in another state?

Second question: Does the federal IRS give similar exemptions for inheritances up to a certain dollar amount? The state laws seem pretty straightforward, and I think I am going to come out tax-free on the state side of things. What I have read about Federal taxes seems a bit murkier.

Third question: Will the inheritance count against my income, in other words will I have to pay income tax (federal or state) on the inheritance come tax time next year?

Thanks in advance for the help, this is the first time I've had to deal with anything like this...

The money that finally comes down to you should be tax free. It's the estate that's taxed. I don't think Indiana taxes what you're going to receive. I've certainly never heard of it.

Ohio does have an estate tax, and there might be a small amount due on 25k.

This estate should be free of federal tax. It's just not nearly big enough.

The executor (and the attorney / accountant engaged) will handle the (estate) taxes, though, and write you a check (less these taxes, fees, expenses, etc.). That's the "go to" person for advice here.

Thanks for your help!