Beneficiary of IRA and TOD brokerage account

[Jfcsoup]

Can you confirm that I need to pay regular income tax on an inherited IRA?

Also, I only have to pay long term capital gains tax on the stepped up value of the inherited TOD brokerage account?

[VolvoGirl]

 Yes.  You pay ordinary income tax on IRA Distributions and RMDs.  And it may push you into a higher tax bracket.  Whose IRA was it?  If it was your spouse's IRA did you move it into your own IRA account?  

For the TOD Brokerage account  you get a step up in value.  What state are you in?    When you sell you only pay tax on the increase over the stepped up value when you sell anything.   So no you don't pay tax on the step up in value, just on the sales.  

@dmertz and anyone else?

[Jfcsoup]

Florida

[Jfcsoup]

It was my Uncle’s account so I can’t move it. Thanks for the confirmation.

[rjs]

@Jfcsoup 

You do not pay any tax on the inherited IRA when you inherit it. When you take money out of the IRA, you pay tax on the amount that you take out.

Similarly, you do not pay any tax on the brokerage account when you inherit it. You only pay tax when you sell an investment in the account.