# 45-Year-Old Inherits $1M IRA, IRS Owns Chunk

> A 45-year-old inherits $1 million IRA but IRS already owns a chunk due to tax rules.
- Title: 45-Year-Old Inherits $1M IRA, IRS Owns Chunk · 24/7 Wall St.
- Summary: A 45-year-old inherits $1 million IRA but IRS already owns a chunk due to tax rules. A 45-year-old beneficiary of a $1 million traditional IRA faces federal…
- Keywords: ira, irs, traditional ira, federal tax, inheritance, tax brackets, required minimum distributions, secure act, tax planning, estate planning, 45-Year-Old, Inherits
- Source: 24/7 Wall St. — https://247wallst.com/personal-finance/2026/09/22/a-45-year-old-inherits-dads-1-million-ira-and-discovers-the-irs-already-owns-a-chunk-of-it
- Author: Jake FitzGerald
- Published: 2026-09-23T02:04:10+00:00
- Read time: 1 min
- Topics: ira, irs, traditional ira, federal tax, inheritance, tax brackets, required minimum distributions, secure act, tax planning, estate planning
## Inheriting a Traditional IRA
A 45-year-old opens estate paperwork and sees $1 million in Dad’s traditional IRA.
## Pretax IRA Balance
The $1 million balance is pretax, owing federal income tax at ordinary rates for 40 years.
## 10-Year Rule Applies
The SECURE Act requires non-spouse beneficiaries to distribute the IRA within 10 years of the decedent’s death.
## 10-Year Distribution Timeline
If Dad died in 2026, the IRA must be fully distributed by December 31, 2036.
## Annual RMDs Trigger Tax
Missing required minimum distributions triggers a 25% excise tax on the amount, dropping to 10% if corrected promptly.
## Tax Impact on $100,000
Annual federal tax on $100,000 from the IRA runs roughly $25,000, totaling $250,000 over 10 years.
## State Tax Adds Cost
California or New York state tax adds another $70,000 to $90,000 to the IRS over 10 years.
## Why Year 10 Distribution Fails
Taking the entire $1 million in year 10 pushes taxable income into 32% and 35% tax brackets, costing $80,000 to $100,000 more in federal tax.
## Three Tax Strategies
Smooth withdrawals, time big deductions to distribution years, and front-load in low-income years reduce tax impact.
## Key takeaway

A 45-year-old beneficiary of a $1 million traditional IRA faces federal tax of $250,000 over 10 years due to IRS rules.