Any inheritance tax is paid by the estate prior to distribution to beneficiaries, meaning, you do not report the inheritance as income, it is not taxable. However, if you are a residual benficiary, you may have reportable income generated by the money/assets during 2009 and/or 2010 prior to its distribution. If so, you will recieve a K-1 from the estate for any taxable income, i.e. interest, dividends, gains or losses, rents, royalties, etc., that those assets generate. I too lost my father in 2009, my condolences. Honor your fathers wish for your future by Investing your inheritance wisely.