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- 1Inherited IRAs Leave Two Siblings With $45,000 Yearly Tax Bills▼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 financial advice column examines the case of a couple who died with $900,000 split between two traditional IRAs, having never converted any funds to Roth accounts. Their two children each inherited $450,000 and, under the SECURE Act's ten-year rule, must withdraw and pay income tax on the money within a decade — roughly $45,000 a year in taxable income each, stacked on top of their own salaries. The case highlights how inherited traditional IRAs can push beneficiaries into higher tax brackets.