Dear Tax Guy: My mother passed away in first quarter 2021, leaving me a designated beneficiary brokerage account and an IRA account.
There’s a tax way to think about the approximate $28,000 loss gnawing at you. If you want to liquidate these inherited accounts, the tax code might help — but a nasty tax bite could be lurking if you aren’t aware. That would’ve happened by itemizing your deductions and taking advantage of a miscellaneous deduction, he said.
A sudden one-year income spike from the closed-out IRA could potentially push you into a higher tax bracket and have you facing a bigger tax bill that year, Rosa noted.