Hi @rpozzy !
The rules differ if you are an "Eligible Designated Beneficiary" or a "Designated Beneficiary".
"Eligible Designated Beneficiary" means you are either a:
* Minor child of the original account holder
* Chronically Ill
* Permanently disabled
* Not more than 10 years younger than the original account holder
In this case you can open an Inherited IRA using a "life expectancy" method, or "10-year method", or you can take a lump sum distribution, which would possibly cause you the issues you are concerned about.
If you are not an "Eligible Designated Beneficiary" then you are a "Designated Beneficiary". You have ten years from when the account holder died to distribute all the assets. So, you could break up the distributions over those ten years. If the account holder was subject to take the Required Minimum Distributions - RMD- then you will have to take those.
In any event the tax impact will be determined by any other taxable income that you receive in any of the years that you take the distributions. It will be taxed at your marginal rate for that year based on your total taxable income.
Here's a resource that may shed further light on your situation:
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-beneficiary#:~:text....
Hope this helps!
Cindy
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