IRA

[userjgood6812]

My wife passed away in 2023 and did not have me listed as the beneficiary of an IRA. I contacted the attorney who completed our Will and he advised that it would have to go into her estate and it will cost $3000 to have it transferred to me. I paid the fee out of after tax funds. I understand that I can deduct that cost from the proceeds of the IRA. Now that I have the funds in my account, how would I withdraw the $3000 and not pay taxes on it?

[DaveF1006]

This is a legal fee to transfer an inherited IRA. Personal legal fees are not tax deductible in your return.

[userjgood6812]

Not sure if my question was fully answered.  While I understand that legal fees are typically not deductible; it is my understanding that if you must incur legal fees (after tax dollars) to obtain pretax dollars,  that those legal fees can be deducted from the proceeds of the IRA.  Is that correct?  In short, I hired an attorney out of pocket to settle an estate involving an IRA of my wife.  Once the IRA was finally transferred to me, must I now pay taxes a second time on that portion of the new pretax funds?

[CatinaT1 · Accepted solution]

This cost would be an expense of her estate. The estate can deduct the $3000. I would talk to the attorney to see why the $3000 was not paid by the estate.