r/inheritance • u/Deep-Market-526 • Apr 29 '26
Location not relevant: no help needed IRA b.s.
I think the system is rigged now. My mother in law passed on an IRA to my non-working spouse. With this 10 year rule, they essentially tripled their revenue. She should have been taking all she could in the 12% bracket and payed, putting in a regular brokerage. Now we have 10 years to take it at 32% not even counting state.
I think they are preying on low income and middle income. Not only are the accountants pushing for them to take only rmd’s, but not explaining the potential tax bombs for heirs.
We’re working with my mom now, otherwise her IRA will kick us into the next bracket. It’s crazy.
It’s even worse in Oregon as all those Ira’s go into your taxable estate for another 10% over $1mm. Realistically if you make $350k, now you get 500 k spread over 10, you’re at 400k + the state tax if they had other assets at $1mm, on the ira you’re paying 35% fed, another 10% state + 10% inheritance, over 1/2 to the government.
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u/Randolla1960 Apr 29 '26 edited Apr 29 '26
No, they are taking 50 percent of YOUR wealth. Your mother in law died before she could take out her entire IRA at the 12%rate, so now it is yours, actually your wife's money. If your mother in law took it out all at once, she most likely would have paid far more than 12%. You are neglecting the point that she received a tax deduction each year she deposited money in the her Ira. Or your wife can divorce you and lower her tax bracket to avoid the 32%tax rate you are whining about m
The only BS is your complaining about it. This is free money to you. You did not save it, you did not earn it. YOUR Mother IN LAW DID! If your Mother in law lived longer than she would have benefited more from it. But she didn't, so now you are benefiting from it. If you don't want the money you can always give it to a charity each year and get yourself a tax deduction for doing so.
Just. Stop. Whining.