So my grandmother passed a month ago and apparently she left me a little bit of money, talking about less than 50k. My question is do I have to pay federal and state taxes on that money. From what I gathered on the ol’ Inter web is that IN doesn’t have an inheritance tax and the federal govt doesn’t start taxing on inheritance until millions are given away. But, when dealing with the banks an paper work, they ask how much taxes I want taken out. I have even talked with a person a one of the financial institutions in our state and knows the amount to be going to me but still asks how much I want taken out for taxes. So for any of you fellow ingoers who have received some inheritance or anybody that has any knowledge about this I would greatly appreciate your input. Thanks