# Who Pays the Tax on a $1 Million IRA?

> Leaving a $1 million IRA to kids in peak earning years taxes them at 35% while converting in your 60s keeps 22% tax rate.
- Title: Who Pays the Tax on a $1 Million IRA? · 24/7 Wall St.
- Summary: Leaving a $1 million IRA to kids in peak earning years taxes them at 35% while converting in your 60s keeps 22% tax rate. Parents leaving a $1 million…
- Keywords: traditional ira, roth ira, tax bracket, federal tax, income tax, ira conversion, tax planning, parents, children, federal tax rate, Pays, Tax
- Source: 24/7 Wall St. — https://247wallst.com/personal-finance/2026/10/12/leave-a-1-million-ira-to-kids-in-their-peak-earning-years-and-the-irs-collects-about-350000-convert-it-in-your-60s-and-the-same-money-is-taxed-at-22-not-35-because-whose-bracket-pays-is-a-choice
- Author: Vilma Rios
- Published: 2026-10-12T09:43:10+00:00
- Read time: 1 min
- Topics: traditional ira, roth ira, tax bracket, federal tax, income tax, ira conversion, tax planning, parents, children, federal tax rate
## Tax Code Decides Who Keeps IRA Money
Most parents assume leaving a traditional IRA to their kids is generous but the tax code decides who actually keeps the money.
## Inherited IRA Tax Bill for High Earners
Adult children who inherit a $1 million IRA must empty it within a decade and pay $350,000 in federal tax over 10 years.
## Roth Conversion Tax Rate Advantage
Parents converting $1 million to Roth in their 60s pay $220,000 in federal tax over nine years at a 22% tax rate.
## Why the Tax Difference Matters
The tax bracket that pays makes all the difference: kids in peak earning years pay 35% versus parents at 22%.
## 10-Year Rule for Inherited IRAs
Children who inherit a traditional IRA must empty it within 10 years, with every dollar stacked on top of their paychecks.
## Tax Calculation for Inherited IRA
Each child inherits $500,000 and files jointly with taxable income of $600,000, paying $17,500 in federal tax annually.
## Tax Calculation for Roth Conversion
Parents with $133,000 income convert $110,600 annually at a 22% tax rate, paying $24,332 per year for nine years.
## When Traditional IRA Still Wins
Leaving the traditional IRA still makes sense for parents whose heirs earn modest incomes or for money going to charity.
## The Tax Advantage Consequence
Parents who convert to Roth in their 60s keep $130,000 more in the family after 10 years of tax payments.
## Key takeaway

Parents leaving a $1 million traditional IRA to kids in peak earning years face $350,000 in federal taxes over 10 years versus $220,000 if converted to Roth in their 60s.