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If it was a 'Traditional IRA" then you will have to report it as income on either line 15 or 16 of your tax return. See the attached link, specifically the section that deals with inherited from someone other than your spouse.
If it was from a "Roth IRA" then there is no tax liability.
You must report 100% of the proceeds as income in the year you receive it. It will added to your other income and become part of your gross income (Line22 of 1040). Any adjustments to income, deductions, etc will reduce that income to determine your total tax.
You will pay income tax on the distribution based upon the rate calculated as a result of your tax bracket.
You should havee received a 1099 from the custodian and, based upon what you have told me Box 7 (Distribution Code) of the 1099 should have a "4" in it.
I hope this answers your question.
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