Should I be taxed on the sale of a bond I inherited? How do I know if I was or not?

When you inherit a bond, there are two type of income that you may have. 

The first is interest. If there is taxable interest on the bond, you will receive a 1099-INT. This is reported on line 2b of your 1040. That line will show all of your taxable interest, so it may include amounts from other accounts as well.

You also report the sale of the bond, which should not show much gain, if any. This is reported to you on Form 1099-B and when you enter it in your return, it is reported on Form 8949. Your net gain or loss ends up on line 7 of your 1040. 

When you inherit a bond and then sell it, you have to report the sale of the bond, but you use the Fair Market Value (FMV) of the bond at the time you inherited it as its basis, so there is usually little or no gain or loss. 

For example, you inherit a $5000 bond and sell it for $5000. When you report it on your taxes, the transaction looks like this:

In this case, there is no gain or loss.