Surviving wife is only 45 and has $100,000 in her IRA (all community property). Husband dies and his estate has interest in her IRA. Is his half of IRA valued at $50,000 on his estate tax return? Or, is it discounted: 1. at least 10% as any withdrawal is subject to the ten percent penalty excise tax; or 2.discounted even more, because wife doesn't have to pull it out for another 25 years. (who knows what will be in it then).


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Jenny E

The value, for 706 purposes,of an IRA is its fair market value on date of death. There is no discounting of the sort you've described.

If the beneficiary is a surviving spouse, the IRA qualifies for the Marital Deduction, which means none of that asset is includible in the TAXABLE estate.



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John L. Olsen, CLU, ChFC
Olsen Financial Group
St. Louis, MO