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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7213
Experience:  15years with H & R Block. Divisional leader, Instructor
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I have skin cancer and am on permanent disability at 52yrs

Resolved Question:

I have skin cancer and am on permanent disability at 52yrs of age. Only remaining investment I have in $107,000.00 in an ira which was from 20 yrs of service on wall street however the firm declared bankruptcy and was absorbed by a competitor in a garage sale. Have a friend who has a 14 yr old boy and is divorced due to a violent ex-husband. I want to give this to her for her security and her sons. Can you tell me what can I do to sign said funds over to her and try to secure any tax butchering by the IRS?
Submitted: 11 months ago.
Category: Tax
Expert:  Robin D. replied 11 months ago.

Robin D :

Hello and thank you for using Just Answer,
The amount will be a gift. Although you can not assign the IRA to the friend you could cash it out and then give the money to the friend.
As you are disabled you would be allowed the exception for any penalty (10% would apply because you are under 59 1/2). You would use form 5329 to claim the exception form penalty.
The Form 709 would be required because the gift limit is $14,000 in one year but you can claim the lifetime exclusion on gifts and actually pay tax.

Robin D :

All the above is with the understanding that the IRA is a traditional IRA and no tax was paid on any amount in the IRA.

Robin D :

Please let me know if you need clarification on any of the above info (especially on the law about gifting your IRA).

Customer:

The IRA is a FIDELITY ONE HOWEVER I HAVE A QUESTION AS TO GIVING THE GIFT TO MY FRIEND. WILL SHE HAVE TO CLAIM THE GIFT?

Robin D :

No, your friend would have no tax event at all from the gift.

Customer:

THANK YOU FOR EVERYTHING

Robin D :

You are most welcome

Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7213
Experience: 15years with H & R Block. Divisional leader, Instructor
Robin D. and 2 other Tax Specialists are ready to help you

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