Hello,

Once inheritance/estate taxes are deducted,if applicable, am I also responsible for declaring the amount on my individual federal/state tax forms or is this amount considered unearned income and does not have to be declared on my 2008 federal/state taxes? Thanks.

There is no tax on inheritance. However, the estate of the deceased is taxable if the estate exceeds 2 million.
For more information read: Your U.S. Tax Return: Tax on Inheritances (http://taxipay.blogspot.com/2008/02/tax-on-inheritances.html)

What MukatA is saying is that YOU will pay no taxes at all.

All of the taxes, if any, will be paid by the estate before you ever see the money.