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The interest earned on the CD is taxable to you in the state of Colorado. One way to avoid that is to withdraw the money from the certificate of deposit before any interest is earned. This may be subject to an early withdrawal penalty, check to see if the bank will waive the penalty since this is a payable on death account.

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9y ago
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15y ago

Just for being named beneficiary...no. If your receiving the CD or income from it after the passing of the owner, normally it is taxed as part of his estate, although other possibilities exist too.

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Q: Are there Taxes on a beneficiary of a CD?
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