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RD
RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience:  CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
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Can one roll over a traditional IRA into a CD

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Can one roll over a traditional IRA into a CD?
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RD :

One can roll over a traditional IRA into a CD. However if the IRA is transferred to a regular CD than you will owe early distribution penalty of 10% if you are under 59 1/2 years old. You will also owe income tax on such distribution amount.

JACUSTOMER-r6osq9bw- :

Thank you. A follow on question is-- I believe a IRA benificary over 65 has just 5 years to withdraw all monies in the IRA, is that true? Also if the benificary or another non-related person is signed on to the account as a co-owner does that rule still apply

JACUSTOMER-r6osq9bw- :

Thank you

RD :

Is this an inherited IRA?

JACUSTOMER-r6osq9bw- :

The IRA is an item in the IRA holders Will.

RD :

If the IRA is taken out by the owner than he does not have to take it out in 5 years since he is 65 years already. He can take out over a number of years. Note that the required minimum distribution will start when he is 70 1/4 years old.

RD :

sorry 70 1/2 years

JACUSTOMER-r6osq9bw- :

OK, I understand the limatations for the origional owner. So if someone else becomes the new owner thru inheritance or a will etc and the new owner is 65 or older then their is no limitation on the time to withdraw except as stated for age 70 1/4 requirements.

RD :

If the IRA is inherited by a beneficiary(other than spouse) than he can rollover the entire funds directly to a INherited IRA account and withdraw the entire amount either within five years or "stretching" it over his life expectancy. He does not have to withdraw this over a 5 year period only.

JACUSTOMER-r6osq9bw- :

Thank you

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