Legal Question in Tax Law in California

Re: taxes due to beneficiaries

Yyou should consider it. IRAs are seperate from property that "steps up in basis" and as such they can carry with them built in income tax.

Essentially, the capital gains your Mother had built into the IRA is something you are going to have pay when you take distributions from the IRA account. If those capital gains are significant (meaning she purchased the IRA assets for little pre-tax money, and they have appreciated significantly) and you do not need the money immediately, then it might make sense to spread the payments out as long as possible.

That being said, I question whether it is worth the expense of a CPA. The tax exposure is unlikely to be more then 300 dollars on 2,000 dollars of IRA assets (and likely much less then 2,000 dollars). While you could potentially spread those distributions of many years (depending if you are a designated beneficiary, whether your Mother was recieving mandatory disbursements, whether you need the money immediately, and depending on your age), the actual cost from a tax perspective might not be worth hiring tax counsel on the issue. What I mean is that they might be able to save you money, but it is questionable whether they are going to save you enough money to make their fees worthwile.

I hope this helps, I am in Northern California so I do not have a local CPA to send you to.