Federal Estate Tax exclusion

[crevitch]

I am confused as to whether the values of qualified accounts are included in the estate tax exclusion.  Qualified accounts like IRA's bypass the estate and go to the beneficiary as inherited IRAs, but do they count towards the total estate tax exclusion?  For instance, if the exclusion was $5M, and an individual had $3M in post tax assets and $3M in IRA's, how much would be subject to estate tax? What if the exclusion was $5M, there was $6M in the IRA and $3M in a conventional account, how much would be subject to estate tax?

[Anonymous_]

The values of retirements accounts, such as IRAs, are included in the gross estate calculation (for federal estate tax purposes).

[Mike9241]

the current exclusion is over $12 million. IRA and all other retirement accounts are deemed to be items of income in respect of a decedent (IRD). They're part of the estate and eligible for the estate exclusion.   however, there are specific rules for the heirs regarding the time frame to withdraw the money. like RMD's. failure results in penalties. AS IRD the distributions can be taxable to the distributes to the extent of the taxable portion of the distribution.  

[Anonymous_]

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@crevitch wrote:

What if the exclusion was $5M, there was $6M in the IRA and $3M in a conventional account, how much would be subject to estate tax?

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Simple answer: $4 million ($6 + $3 - $5 = $4).