Do you have to pay federal taxes on an inheritance?

Life insurance proceeds are not subject to Income Tax. There is no Federal Inheritance Tax, but rather a Federal Estate Tax. So wether or not the insurance proceeds are taxable depends on several factors; the size of the taxable estate, and wether or not the insurance police is includable in the taxable estate. That again depends on several factors, most importantly who owned the policy and who the named beneficary was. If the the policy is includable in the estate and the estate is large enough to incur estate tax liability, the estate will have to pay tax on the insurance proceeds. Generally speaking the beneficiary is only liable for the tax (if any) under specific circumstances