Estate Tax Deduction on IRD
I have inherited an IRA in which the estate taxes will be paid out of the residual of the estate. I am only a beneficiary of the IRA so I will not be paying any of those estate taxes. Am I still entitled to take the estate tax deduction on my 1040 or can i only take it if i have physically paid the estate taxes attributed to the IRA?
Permalink Submitted by Al Fry on Mon, 2007-11-26 22:36
You get the IRD deduction, since you are the bene. The estate attorney or CPA should be able to tell you how much you can deduct.
Permalink Submitted by Janine Janine on Tue, 2007-11-27 21:17
What does IRD stand for?
Thank you.
Janine
Permalink Submitted by Alan Spross on Wed, 2007-11-28 00:11
IRD = Income in Respect of a Decedent.
If you inherit an IRD assets, ie. income that the decedent had a right to receive but did not, AND if the decedent’s estate has a federal estate tax liability, the portion of the estate tax allocated to the asset you inherit can be claimed by you as a misc itemized deduction. The 2% of AGI limit does not apply. The amount of the deduction is usually calculated for you by the firm that prepares the 706 estate tax return. Also see Pub 559.