Tools for Heirs and Beneficiaries in Tennessee

Tennessee levies no estate or inheritance tax; only the federal estate tax applies above $15,000,000.

6 tools for Tennessee

Who Inherits Without a Will?

Without a will in Tennessee, descendants divide what passes to them per capita with representation, and an heir must survive the decedent by 120 hours to inherit.

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How Much Are Estate & Inheritance Taxes?

Tennessee levies no estate or inheritance tax; only the federal estate tax applies above $15,000,000.

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What Taxes Apply to My Inheritance?

Tennessee imposes no inheritance or estate tax; probate assets arrive when the estate closes, 6 months to 9 months for a simple estate.

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How Does Step-Up in Basis Work?

Inherited assets in Tennessee take a basis reset to fair market value on the date of death, and the gain on a later sale faces no state capital gains tax.

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When Do I Have to Withdraw an Inherited IRA?

See which federal withdrawal rules apply to an inherited IRA, Roth IRA, or employer plan, the deadline year, and the missed-withdrawal tax.

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Do I Have to File Tax Returns for Someone Who Died?

Tennessee has no state income tax, so only the federal final Form 1040 is due for the decedent; a federal estate tax return (Form 706) is required only for estates above $15,000,000.

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No. Tennessee imposes no state estate tax and no inheritance tax. Only the federal estate tax applies, on an estate above $15,000,000, an exemption the One Big Beautiful Bill Act (P.L. 119-21 §70106) set permanently from 2026 and indexes for inflation.

Not on the inheritance itself: Tennessee taxes neither the estate nor the beneficiary, and the IRS does not treat an inheritance as income. What an heir can owe is income tax on withdrawals from an inherited retirement account, and capital gains on a later sale of inherited property, where the basis is reset to fair market value on the date of death and the gain faces no state capital gains tax.

No. The IRS does not treat inherited money, real estate or personal items as income, so a beneficiary in Tennessee does not report them on a federal return when received. Two exceptions: an inherited retirement account (a 401(k) or a traditional IRA) is taxed as ordinary income as it is withdrawn, and earnings after the date of death are taxable. Inherited property takes a stepped-up basis, its value on the date of death, for any later capital gain.

When someone dies, the cost basis of the property they leave is reset to its fair market value on the date of death under IRC § 1014. A later sale is taxed on the gain above that stepped-up basis, not above what the original owner paid, so the appreciation of the owner's lifetime is never taxed. The rule is federal and applies in Tennessee as in every state.

Tennessee intestacy law decides. Tennessee follows separate property rules: the surviving spouse's share depends on whether children survive and whose children they are. The estate passes to the closest surviving relatives, in most cases the spouse and children first, then in order: Parents; Siblings and their descendants; Grandparents and their issue; The State of Tennessee (escheat).