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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13314
Experience:  15years with H & R Block. Divisional leader, Instructor
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Divorced last year. Turned 62 and took IRA money out, $25,000.

Customer Question

Divorced last year. Turned 62 and took IRA money out, $25,000. No job, Medicare 885 a month. 94 year old mother gave me EE bonds to cash, about $8000. Gave IRA money to ex to side house, put on deck. Now am told I owe at least $500 AR state taxes, and thousands to IRS. I have nothing. My question is... could my mother take bond cash income on her taxes (she owed nothing) or could my ex take some of my IRA and claim it (she doesn't even file) to save me taxes or worse? I have no way to pay even my state taxes.
Submitted: 8 months ago.
Category: Tax
Customer: replied 8 months ago.
I need to know if the EE bond income could be filed under mother's taxes. Would the bank have to change social security number to hers? Would they even do that? Could my ex take some of the responsibility of my IRS income since most benefit went to her. She had not job so she did not file.
Expert:  Robin D. replied 8 months ago.
HelloThe "assignment of income" doctrine states that income is taxed to the one who earns it -- a taxpayer cannot avoid tax by assigning his income to another party or entity. Gross income derived from property must be included in the income of the person who beneficially owns it. Assignment of income adds to the "gross income" definition -- there is an implicit requirement that gross income be included in the tax return of the appropriate taxpayer. You are not allowed to reassign income to another person. The bonds, unless in your mother's name would not be allowed as income to her. Savings bonds are exempt from taxation by any State or political subdivision of a State, except for estate or inheritance taxes.Interest earnings are subject to Federal income tax.Interest earnings may be excluded from Federal income tax when bonds are used to finance educationUnfortunately all the income is reportable by you on your return.
Expert:  Robin D. replied 8 months ago.
Checking to see if you responded