Tax Law (Questions About Taxes)/Inherrited IRA Question


Hello - My wife and I inherited an existing IRA from our parents.  We take annual required distributions from this account.  I understand that all IRA distributions are taxable at the federal level, but not at the state (Illinois) level.  Does this state tax exemption go away when it becomes an "inherited IRA", rather than a regular IRA?  Any help you could provide on this would be greatly appreciated.  Thanks!


Thanks for your question.

Probably not.  There was a private letter ruling in 2005 in Illinois on this issue and the State ruled that the exemption is available for inherited IRA's.  Therefore, this is most likely the law that applies.  However, technically private letter rulings apply only to the person receiving it.

Since this one has been published, most likely it does hold, but I could not find any additional evidence during a short search either affirming or denying the ruling.

Hope this helps.

John Stancil, CPA

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John Stancil, CPA


I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at I also offer seminars and consultations to churches and clergy on their tax issues at Also visit my blog, I am listed on Tax Connections at Prepare and file your own taxes at


I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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