Legal Question in Tax Law in Texas

Re: Federal Taxes on Inheritence

Gifts and inheritances are excluded from gross income in calculating your taxes. So the simple answer is no, you don't have to pay taxes on the money you receive.

The answer could be more complicated if your great grandmother's farm was held for a while in her estate or in a trust, or if the family owned it in their names as joint owners. If the value of the farm appreciated since your great grandmother's death, either the beneficiaries, the estate, or the trust may have to pay taxes on the capital gain. There could also be complications if the farm was treated as a family farm for estate tax purposes.