I live in Georgia and will be receiving an inheritance of $35k. I was wondering how to get around having to pay taxes on this money, I was told that anything over 10k I had to pay taxes on.

Who told you that you owe inheritance taxes? GA does not have an inheritance tax, and neither does the federal government, so I don't see that you have anything to worry about there. However, depending on the state where the deceased was living and your relationship to him/her (grandchild, niece/nephew, etc) it's possible that you may owe some inheritance tax to that state. So - in what state did the deceased live,and what was your relationship?

Also - in some cases an estate will issue schdule K-1's to the herrs to document income received by the estate that is assumed to be distributed to the heirs. In this case you report the income from the K1 on your income tax return. Typically this happens for larger, more complicated estates that take more than a year to probate. The executor of the estate could tell you whether this is the case here.