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taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 389
Experience:  Licensed CPA, MA, MST with 29 year's experience. Teach Accounting and Tax courses at Masters level.
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I am the beneficiary of my deceased fathers IRA accounts.

Resolved Question:

I am the beneficiary of my deceased father's IRA accounts. How will this inheritance effect me regarding income taxes. I am under 59 1/2. I are in the process of buying a home would like to get the down payment from these recently inherited IRAs. Also, I am the beneficiary of his pension from his former employer; he retired before is death.
Submitted: 10 months ago.
Category: Tax
Expert:  taxmanrog replied 10 months ago.

Welcome to Just Answers! Thank you for giving me the opportunity to assist you! I will do my best to help!

 

I am sorry for your loss! You have my condolences!

 

You can take the IRA payments out in a lump sum, over a five year period, or over your remaining life expectancy. In any of these cases, the amount that you take out will only be subject to regular income tax. The 10% "penalty" tax that is assessed under §72 for early distributions from an IRA does not apply to distributions due to death. So all you will pay is income tax at whatever your marginal rate is.

 

The same goes for your dad's pension plan. The amounts you receive each year will be reported on a Form 1099-R, just as the IRA distributions would be. They also would be subject to only regular income tax.

 

I hope this answers your questions! If you have any more, please let me now, and I will answer them. If my answer has been helpful, please rate me highly. I would appreciate it!

 

Again, thanks! Have a great week!

 

Roger

taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 389
Experience: Licensed CPA, MA, MST with 29 year's experience. Teach Accounting and Tax courses at Masters level.
taxmanrog and 9 other Tax Specialists are ready to help you

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