USA IRA Fund asset movement without high tax rate

[Pen16]

Hello, i have a question regarding an IRA fund. A family member recently passed away and left a decent sum of money in the IRA fund. Now my mom is in charge of the account and she wants to divvy out the money as the will stated.

The only problem is it will taxed 41% if we try to move it. That's way to much for the IRS and was wondering if there is another way around the tax rate. Maybe moving it slowly or at certain amounts.

Unfortunately I know nothing about the IRS or accounting, heck i may be in the wrong place, but is there anybody who has any ideas?

 

[mackwaa]

Hi Pen16

Sorry about your family member.

I'm not very familiar with how a US pension fund is taxed upon death but I'll add my opinion anyway

Here is a good article re: Inheriting an IRA:

Fool.com: An Inherited IRA

While waiting the suggested 5 years to maximise the deferred tax I don't think that will make your problem go away. Personally I'd look at the marginal tax rates of each of the individuals receiving the funds and distribute as much as I could to each person each year (avoiding the top tax bracket) and then distributing the remaining funds in the 5th year.

To do this you'd have to find out what each of the beneficiaries earn and how the distribution impacts them.

Can you explain the 41% calculation?