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TaxRobin, Senior Advisor
Category: Finance
Satisfied Customers: 15733
Experience:  15 years of experience in financial advising with emphasis on tax issues.
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I have an inherited fidelity ira that has sat dormant since

Customer Question

i have an inherited fidelity ira that has sat dormant since my wife died in 2004. I have never taken a MRD. Can I cash out that IRA to pay off my house
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: My wife was 53 when she passed in 2004, that is when I inherited a fidelity IRA. I have never done anything with the account and now I would like to take out the money to help pay off my house. It is not a lot of money, less than $10,000.00
JA: Is there anything else the Accountant should be aware of?
Customer: I have received a letter from fidelity saying I have never taken any MRD and that I may be penalized for that.
Submitted: 1 year ago.
Category: Finance
Expert:  TaxRobin replied 1 year ago.

Hello, I'm Robin. Welcome to JustAnswer. I'm reviewing your question now and typing up my reply. I'll post that in just a few moments.

Expert:  TaxRobin replied 1 year ago.

Required Minimum Distributions (RMDs) generally are minimum amounts that a retirement plan account owner must withdraw annually starting with the year that he or she reaches 70 ½ years of age or, if later, the year in which he or she retires.

When you inherited the IRA, if you treated it as your own and it was changed to your name, you would need to look at your own age for any RMD.

When you turn or turned 70 1/2 then you would have to take RMD.

You must take your first required minimum distribution for the year in which you turn age 70½. However, the first payment can be delayed until April 1 of the year following the year in which you turn 70½. For all subsequent years, including the year in which you were paid the first RMD by April 1, you must take the RMD by December 31 of the year.

If an account owner fails to withdraw a RMD, fails to withdraw the full amount of the RMD, or fails to withdraw the RMD by the applicable deadline, the amount not withdrawn is taxed at 50%.

First you need ot make sure you are required to make RMD withdrawals.

Expert:  TaxRobin replied 1 year ago.

I am checking back to see if you needed clarification. Your age was not mentioned in your original post.