✉news BusinessPersonal Finance first seen 13 h ago, last 2 h ago, peak #16

Heirs Face $45,000 Annual Tax Bills on Inherited IRAs

Original: A Couple Who Dies With $900,000 Between Two IRAs, Never Having Converted a Dollar, Leaves Two Kids $450,000 Each and Ten Years to Pay Tax on It, About $45,000 a Year Apiece on Top of Their Own Salaries

A personal finance example making the rounds describes a couple who died with $900,000 split between two traditional IRAs, having never converted any of it to Roth accounts. Under the SECURE Act's 10-year rule, each of their two adult children inherits $450,000 and must draw it down within a decade, adding roughly $45,000 a year in taxable income on top of their own salaries. Commenters cite it as a cautionary tale about Roth conversions and inherited-IRA planning.

Why now: The SECURE Act's 10-year withdrawal rule is forcing inherited-IRA tax planning into the spotlight for heirs of retirement accounts.

IRSSECURE Acttraditional IRARoth IRA

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• A Couple Who Dies With $900,000 Between Two IRAs, Never Having Converted a Dollar, Leaves Two Kids $450,000 Each and Ten Years to Pay Tax on It, About $45,000 a Year Apiece on Top of Their Own Salaries · 24/7 Wall St.

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