How do you deduct inheritance that you put into a roth IRA so you end up with less inheritance tax?

[BillM223]

Please clarify if this is an inheritance you are giving or receiving? Also please clarify when this money is going into the Roth IRA, while you still have it or after you inherit it? On its face, your question doesn't make a lot of sense, so I must be missing something.

[hedgiefan4]

The inheritance was received. I used some of those funds to contribute to my existing roth ira.

[hedgiefan4]

*The contribution was made after the first of the year but still for the 2022 tax year

[BillM223]

First, on the federal level, there is no tax on receiving an inheritance. I can't say for the states.

Second, there is no deduction for contributing to a Roth IRA in any case.

[fanfare]

By inheritance, do you mean Inherited IRA?

Inherited IRA cannot be rolled over into your IRA.

You must have compensation to support your contribution and you must not exceed the MAGI limit

A big inherited IRA distribution can do that to you.

@hedgiefan4 

[Opus 17]

@hedgiefan4 

Why do you think you are paying inheritance tax? Is this a state tax? At the federal level, a large estate may be taxed by the federal government, but the estate pays the tax, not the heirs. 

There is no federal tax deduction for contributing to a Roth IRA, the whole point of a Roth IRA is that you do not get a tax deduction for contributions but your withdrawals or tax free.

If you think that making a Roth IRA contribution will somehow reduce your state inheritance tax, you will have to tell us what state and explain more about your situation.