If your intent was to share $10,000 of your inherited IRA balance and you not have to absorb the tax consequences of the $10,000 distribution from the IRA, your gift to him should have been reduced by the increase tax liability that you incurred by you receiving the $10,000 distribution. For example, if your marginal tax rate (federal and state combined) is, say, 30%, you would gift him $7,000 and use the other $3,000 to pay your federal and state income taxes.
