Are there tax requirements for a transfer on death account? If so, how do I file it?

Question

I live in the U.S.
My great aunt passed away and I was listed as her beneficiary on her transfer on death Certificate deposit (CD) account.
The account has/had approx. $30,000 USD, which is being cashed out and sent to me by check (since I don't bank where she banked)
What I'm wondering is do I have to report/claim this as income somehow? Do I put this on my taxes? If I put them in my taxes, then I'll be taxed on the income. To my knowledge, I don't have to pay taxes on this type of inheritance in Oregon (She lived in Illinois, also my understanding there isn't inheritance tax in either place)?
If I'm understanding this website correctly, I don't have to do anything (paying tax wise nor any tax forms) - but I'm not sure I'm understanding it correctly. https://finance.zacks.com/tod-account-taxable-10361.html#:~:text=The%20amount%20that's%20in%20a,may%20have%20to%20pay%20that.
Anybody know if TOD CD accounts should be reported somehow? Or if I'll have to pay taxes on it?
Thank you! I appreciate any/all knowledge.

Morrison Chang · Answer

Condolances on your loss.
Based on:
https://taxfoundation.org/state-estate-tax-state-inheritance-tax-2020/
https://www.alllaw.com/articles/nolo/wills-trusts/claiming-money-from-pod-bank-account.html
It appears that you don't need to pay any inheritance tax either in Oregon or Illinois. Realize that Estate is liable for taxes should the assets of the decedent (your Great Aunt) exceed the Federal or State estate asset exemption limits, 4 million for Illinois.
Having a Payable on Death for a financial account means that the account avoids probate (assuming nothing contrary is explicitly stated in any will left by the decedent).
If your Great Aunt had a will or went through probate, there should be an Executor or Administrator responsible for settling your Great Aunt's debts and distributing the assets per the will or local probate rules. You may want to check with them to see if there any issues.
Otherwise unless there is a state inheritance tax, beneficiaries don't pay taxes on the distribution from an Estate or in your case a POD account.

Are there tax requirements for a transfer on death account? If so, how do I file it?

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