Are inherited IRA withdrawals taxable?

Traditional IRA: what the publication says

If you inherit a traditional IRA from someone other than your deceased spouse, Publication 590-B (2025) says you cannot treat it as your own: you cannot contribute to it or roll amounts into or out of it, though you can move it by trustee-to-trustee transfer to an IRA set up in the deceased owner’s name for your benefit. Like the original owner, you generally will not owe tax on the assets until you receive distributions, and you must begin distributions under the rules for beneficiaries. The taxable part of a distribution is included in your income at your rate. The rollover rule is the exception: a surviving spouse can roll a distribution over to another traditional IRA and avoid including it in income for the year.

Basis and the estate tax deduction

If the decedent had basis from nondeductible contributions, that basis stays with the IRA. Unless you are the spouse and treat the IRA as your own, you cannot combine it with basis in your own IRAs or in other inherited IRAs, and you complete separate Forms 8606 for each. A beneficiary may also claim a deduction for federal estate tax paid on the part of a distribution that is income with respect to a decedent, taken in the year the income is reported. Any taxable part that is not income with respect to a decedent has no such deduction. The publication refers to Pub. 559 for how to claim it.

No 10% tax for beneficiaries

Early distribution rules turn on your age, but the list of exceptions includes being the beneficiary of a deceased IRA owner. If the owner dies before 59½, assets can go to a beneficiary or estate without the 10% additional tax. One trap: a surviving spouse who treats the inherited IRA as their own and then withdraws before reaching 59½ may be subject to the 10% tax, because it is then their own IRA. The spouse who stays a beneficiary avoids it.

Deadlines and the excise tax

The 10-year rule requires beneficiaries who are not taking life expectancy payments to withdraw the entire balance by December 31 of the year containing the 10th anniversary of the owner’s death; for an owner who died in 2025 that is December 31, 2035. It applies to a designated beneficiary who is not an eligible designated beneficiary, and to an eligible designated beneficiary who elects it when the owner died before the required beginning date. If the owner died before the required beginning date, no distribution is required before the 10th year. The 5-year rule applies to beneficiaries who are not designated beneficiaries, such as an estate, when the owner died before the required beginning date: empty by December 31 of the fifth year, so for a 2025 death by December 31, 2030. Eligible designated beneficiaries are the surviving spouse, a minor child of the owner, a disabled or chronically ill individual, or anyone not more than 10 years younger than the owner. If your distributions are less than the required minimum for the year, you may owe a 25% excise tax for that year on the amount not distributed as required, under the publication’s Excess Accumulations discussion. Our inherited IRA 10-year rule calculator models annual payouts and the required beginning date wrinkle.

Inherited Roth IRA: is it taxable?

A qualified distribution from an inherited Roth IRA is tax free. For one that is not qualified, the publication says it is generally included in the beneficiary’s income in the same way it would have been had it been distributed to the owner, and the 10% tax does not apply because the distribution results from death. When the owner died before the end of a relevant 5-year period, each type of contribution is divided among multiple beneficiaries by pro rata share. The publication’s example: Ms. Hibbard died in 2025 with $4,000 of regular contributions, a $10,000 conversion made in 2021 with no basis, and $2,000 of earnings; her four children are equal beneficiaries. An immediate $4,000 distribution to each child is treated as $1,000 from regular contributions, $2,500 from conversion and $500 from earnings, and each child includes $500 in income for 2025. The calculator above reproduces that split.

Worked example

Sam inherits a traditional IRA from his father, who died in 2025 at 70 and had no basis. Sam is a designated beneficiary but not an eligible one, so the 10-year rule applies and the account must be emptied by December 31, 2035. If Sam takes $30,000 in 2026, the whole $30,000 is taxable income for 2026 and none of it faces the 10% tax. If he waits and takes it all in 2035, the same total is taxed in a single year, which can push him into a higher bracket, so spreading it is a planning question for a tax professional. Enter 2025 and the 10-year rule above to see the deadline.

Sources

• IRS Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs) (2025): Traditional IRAs: What if You Inherit an IRA?; IRA Beneficiaries (5-year rule, 10-year rule, eligible designated beneficiaries); Early Distributions: Exceptions; Roth IRAs: Distributions After Owner’s Death. Read November 2, 2026.

Edition read: Publication 590-B (2025), for use in preparing 2025 returns. Dollar limits and dates in this publication are for 2025; check the current publication and form instructions for your tax year. This page summarizes the publication and does not replace it.