Legal Question in Wills and Trusts in Illinois

You do not have to pay income tax, but the estate, if large enough, may have to pay an inheritance tax from part of the estate. See a tax professional or probate attorney to make sure the taxes are handled correctly.

Generally, gifts from deceased persons are exempt from income tax. However, if the property gifted results in income (interest, dividends, rents, royalties, etc.) you need to pay tax on the income. Also, if you receive a gift that was sheltered from tax in the hands of the decedent, such as IRA accounts or certain annuities, you need to carefully consider income tax consequences of using the money before you decide how to take the gift. Consulting with your tax advisor is strongly recommended if you inherit IRAs or other tax sheltered gifts.