Tax on Inheritance

[DAS]

What is the name of your state (only U.S. law)? SD

I did post this in a different section did receive my answer but I have another question.

I was notified of an inheritance. This money sits in a CD in Illinois. It is under my grandmothers name with me and my two sons as heirs (I am married and we only have two kids who are 18 and 25 I apologize I don't know the proper term. )

I am now to supply a letter, ss#, and a driver license in order to receive this money - my portion.

Question: I want to give it to my sons equally,(thats what the previous post was on). I was told by the banker that it would be easier just for me to draw it out and then give it to them, otherwise I would have to write a letter expressing this wish. (which isn't hard to do)
But say If I am to draw the money out then give it to my kids isn't there a tax I would be subject too? Is it easier to do it that way.?

[tranquility]

If you're talking about a large sum of money, see an attorney or CPA before doing anything. If you "write a letter" explaining this wish and that is considered a disclaimer, you might have what is known as an "indirect" skip and the Generation Skipping Tax may be implicated.

[LdiJ]

If you're talking about a large sum of money, see an attorney or CPA before doing anything. If you "write a letter" explaining this wish and that is considered a disclaimer, you might have what is known as an "indirect" skip and the Generation Skipping Tax may be implicated.

Or, you could simply accept the cash yourself, and then dole it out to your sons at 12k a year to each of them, which has no tax implications at all.

[DAS]

The funds I am talking about are under $5,000. please don't take that wrong. It is absolutely wonderful that my grandmother did this. But it is also very sad that she is gone. any amount of money is always greatly appreciated and a gift.

If I take this money will I be taxed.

[LdiJ]

The funds I am talking about are under $5,000. please don't take that wrong. It is absolutely wonderful that my grandmother did this. But it is also very sad that she is gone. any amount of money is always greatly appreciated and a gift.

If I take this money will I be taxed.

There might be some small amount of tax on any interest earned after her death, but that would be all. With the amount being well below the annual gifting amount of 12k, you can simply accept it and then give it to your sons, with no tax implications.