The Short Version
When you inherit from a Florida resident, you generally pay no tax on what you receive. Florida has no inheritance tax and no estate tax, and there is no federal inheritance tax. The federal estate tax can touch very large estates (the exemption is in the millions), but the estate pays that before anything is distributed, not you.
The Real Exceptions
- Inherited retirement accounts. Withdrawals from an inherited traditional IRA or 401k are taxed as ordinary income, and most non-spouse heirs must empty the account within ten years. Roth accounts are generally tax-free.
- Selling inherited property. You may owe capital-gains tax if you sell, but only on the gain after the date of death (see the step-up below).
- Inheriting from another state. A few states still levy an inheritance tax based on where the deceased lived; inheriting from a Floridian, there is none.
Why the Step-Up Matters
Inherited assets get a step-up in basis: their tax value resets to the date-of-death value. Inherit a house your parent bought for $80,000 that is now worth $400,000, and you take it at $400,000, so selling near that price triggers little or no capital-gains tax. It is the single biggest reason inheriting beats being gifted an asset during life.
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Do You Pay Taxes on an Inheritance in Florida?
In almost every case, no. Florida has no inheritance tax and no estate tax, and there is no federal inheritance tax either. So when you inherit cash, a house, or a brokerage account from a Florida resident, you generally receive it tax-free. The federal estate tax can apply to very large estates (the exemption is in the millions), but that is paid by the estate before anything is distributed, not by you as the heir.
Do I Have to Report an Inheritance on My Tax Return?
For most heirs, no. An inheritance is not income, so the cash, house, or brokerage account you receive from a Florida resident does not go on your federal income tax return. What can show up later is what the asset does in your hands: interest, dividends, or rent earned after the death counts as your income, and selling an inherited asset can trigger capital-gains tax on the growth after the date of death. Inherited traditional retirement accounts are the big exception, because every withdrawal is taxed as ordinary income. Keep a record of the date-of-death value; it sets your basis if you ever sell.
Are There Any Exceptions?
A few that matter. Inherited traditional retirement accounts (a traditional IRA or 401k) are taxable: when you withdraw the money, it counts as ordinary income, and under current rules most non-spouse heirs must empty the account within ten years. Roth accounts are generally tax-free. And if you inherit an asset and later sell it, you may owe capital-gains tax, but only on the gain after the date of death, thanks to the step-up in basis below.
What Is the Step-Up in Basis, and Why Does It Help?
When you inherit an asset, its tax basis resets to the value on the date of death. So if your parent bought a house for $80,000 and it was worth $400,000 when they died, you inherit it at $400,000. Sell it for $410,000 and you are taxed only on the $10,000 of post-death gain, not the lifetime appreciation. This is one of the biggest advantages of inheriting an asset rather than receiving it as a gift during life.
What if I Inherit From Someone in Another State?
A handful of states (Pennsylvania, New Jersey, Kentucky, Maryland, and Nebraska) do impose an inheritance tax, and it is based on where the person who died lived, not where you live. So a Florida resident inheriting from a relative in one of those states could owe that state’s inheritance tax. Inheriting from a Florida resident, there is none.
Updated on July 12, 2026. Reviewed by Kevin D. Klagge, Esq., Fla. Bar No. 99502. Attorney Kevin Klagge represents families, businesses, and international clients in estate planning and international law, with a focus on Florida legal tools. He litigates estate and business issues in court. General information about federal and Florida law, not legal or tax advice; coordinate with your CPA. Figures and exemptions change. Do not send confidential information until we have agreed to represent you.