Is a large cash inheritance reported to the IRS when deposited in the bank?

Yes, a large cash inheritance is generally reported to the IRS, but it is not considered taxable income for the recipient. When you inherit money, the estate may need to report the inheritance on its tax return, and financial institutions may file a Currency Transaction Report (CTR) for cash deposits over $10,000. However, the recipient typically does not pay taxes on the inherited amount itself.