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Is the deceaseds' estate liable for USA income tax on an IRA ? Or is the IRA paid out to designated beneficiaries which then makes them liable for the taxes ? Thinking of a modest amount , well under one million dollars.

  • The short answer is, if any tax is due, it's due when you withdraw the funds, which leads to complicated questions about when you can or must take distributions. I think this question might be better served at Money SE. – user6726 Jul 1 '18 at 15:47
  • @user6726 I'd agree if the question were more involved, but this fairly preliminary question has a simple straightforward answer that I've provided. – ohwilleke Jul 2 '18 at 18:09
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Is the deceaseds' estate liable for USA income tax on an IRA? Or is the IRA paid out to designated beneficiaries which then makes them liable for the taxes?

Distributions from an IRA are called "income in respect of a decedent" and are taxable ordinary income to whomever first receives the distribution from the IRA, in the year it is received, to the same extent that it would have been income if it had been received by the decedent prior to death.

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