Inheritance tax-

[Marco29]

What is the name of your state? Texas

I recieved $4000 from the disbursement of my father's IRA. Afterwards there was some contention between the two other heirs and in a signed settlement I gave each heir half of the disbursement. I now have a 1099 from the IRA broker. How do I avoid paying federal taxes on money I signed away?

Thanks Mark

[LdiJ]

Originally Posted by Marco29

What is the name of your state? Texas

I recieved $4000 from the disbursement of my father's IRA. Afterwards there was some contention between the two other heirs and in a signed settlement I gave each heir half of the disbursement. I now have a 1099 from the IRA broker. How do I avoid paying federal taxes on money I signed away?

Thanks Mark

I would recommend that you report the disbursement on line 15a of your 1040, but then do not include it on line 15b as taxable income. Then fill out a form 8275 Disclosure Statement to explain that the funds were inherited, and were disbursed to other heirs. You could even enclose a copy of the settlement paperwork.