Question

Paid a 4.5% Tax on an Inherited IRA, can I write this off when I take distributions

Forum|Forum|2 years ago
February 2, 2024
1 reply
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I know the IRD deduction only applies to federal estate taxes paid, but it seems like double taxation and that I should be able to deduct and lower the "taxable amount". If I paid a 4.5% tax to PA on the IRA and I take out $150,000 this year shouldn't I be able to adjust the amount in box 2 to $143,250 (as the value is that after the taxes I already paid on it)?

DaveF1006

No, you will not be permitted to reduce the taxable amount on your 1099R. As far as deducting the inheritance tax paid, if you are over 59 1/2, you are subject to the inheritance tax if the inherited IRA is a traditional IRA. If it is a Roth IRA, you are subject to the inheritance tax regardless of age. These are not tax deductible on the federal or state level.

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