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hrguru206
hrguru206, Consultant
Category: General
Satisfied Customers: 954
Experience:  Human Resources Professional, Bachelor of Science in Business Administration from the University of Central Florida
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My mother passed away in 2010. I thus inherited her IRA.

Resolved Question:

My mother passed away in 2010. I thus inherited her IRA. I was told by the bank that I could close the IRA. However, I how have a 1099-R that lists the former balance of the IRA as taxable income. Is this not covered by inheritance tax law? I thought that it would be and that under the fairly large exemption of inheritance tax, I would not have to pay any tax. Am I missing something?
Submitted: 5 years ago.
Category: General
Expert:  hrguru206 replied 5 years ago.

hrguru206 :

Unfortunately it is my understanding that an IRA can be a double tax hit. As a general rule the value of the account is included in the persons taxable estate for estate taxes and payments from the IRA to the beneficiaries are also subject to income taxes. If you have had both of these occur in the same year, I would strongly advise that you have a professional take a look at your tax return to maximize any losses that may be claimed.

Customer:

Was the tax assessable when I put my mother's IRA in my name, or was the tax assessed when I withdrew money?

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