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My Grandmother recently passed away, we were just informed that her 4 grandchildren of which I am one, have inherited her IRA. Our questions:
Since she left the money to her grandchildren (my mother is deceased) do we have to worry about generation skipping tax?
She lived in Pennsylvania; each grandchild resides in a different state; one lives in Washington State, one in Florida, one in Ohio and one in Pennsylvania, if we take distribution of these funds, what taxes will we have to pay (the amount is not extremely large)?
If my grandmother had debts at the time of her death, will we be responsible for those debits if we choose to claim the funds?
If the IRA was funded by yearly or monthly contributions would the entire amount we receive be taxable to us (assuming we have to pay taxes on the money); or, would only the interest earned be taxable since my Grandmother would have put the money into the IRA on an after-tax basis from her Gross Income?
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