Legal Question in Wills and Trusts in North Carolina

Inheritances are not taxable.

See www.irs.gov:

Question: Are proceeds paid under a life insurance contract taxable and do they have to be reported as income?

Answer: Generally, if you receive the proceeds under a life insurance contract because of the death of the insured person, the benefits are not includable in gross income and do not have to be reported.

For more in depth answers, see the IRS tax booklet on this or talk to a good CPA come tax time. NC generally does what the feds do for estate tax and there is no inheritance tax.