If You Inherited or Will Inherit an IRA, You’ll Be Paying a Tax Bill

This month, I helped a family see and implement some tax mitigation strategies.

If you inherited or will inherit an IRA, you’ll be paying a tax bill. Under current law, you have 10 years from the benefactor’s death to deplete an inherited IRA.

The withdrawals from the account are subject to income tax rates, not long-term capital gains tax rates.

See the problem?

Most of us want our children to be more financially successful than we are. This family is no exception.

Recognizing the difference between mom’s and adult children’s tax rates, we moved significant assets to a place where the sons will never have to pay taxes on inheritance and withdrawals, including growth.

The visibility of assets among generations opens up a world of opportunity.