If someone receives $26000 from the estate of a grandparent for their portion of their deceased parent, is this taxable?
Not at the federal level. Some states have an inheritance tax. If it's a beneficiary IRA, it would be taxable at both the federal and state levels.
Not at the federal level. A few states tax inheritance.
no unless it was a tax deferred account
Ask the executor. Any portion that represents income can be taxable. If it is, you will get a k-1 from them. For example, money from a bank account are generally untaxed. Interest on that money since the grandparent died is taxable. Or stock that has gone up in value, then sold, the gain is taxable. Tax deferred accounts (think IRAs and savings bonds) are taxable.
Pascal the Gambler
Not federally, some states have an inheritance tax, but usually based on relationship and from a grandparent would not likely be.
yes it is. it works spouse to spouse and parent to children, but not grandparent to grandchildren
Nope. The estate pays a tax, the heirs do not. (At least federally. A few states do have an inheritance tax.) If you receive property (e.g. stock), when you sell it you will owe capital gains tax on any increase in value since the date of death.