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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
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Experience:  10 years experience
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My mother just turned 81 and is thinking of taking a distribution

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My mother just turned 81 and is thinking of taking a distribution from the IRA my father created while he was working (he's deceased). She was told she would pay taxes on the distribution. How do we determine the amount of taxes, and is there a favorable way to take the distribution with minimal taxes?

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarification.


The IRA distribution will be considered income for her and has to be reported as income when she files her personal tax return, to determine what taxes and credits she may recieve, she has to determine how much the distribution will be and what federal tax bracket she will be in, also state tax bracket as well. To minimize her withdrawals she can do some in this tax year and wait for January 1 to withdraw the rest as then the income is reported in two different tax years.

Customer: replied 6 years ago.
If she refrains from withdrawing a distribution, and I receive the IRA as part of an inheritance, is there a tax advantage to waiting (for me, not her)?
no, as you will have to pay taxes on the withdrawl as well. She can withdraw the amount and gift it to you and then you will not pay taxes on it, and she would claim the lifetime gift exemption to avoid any gift tax. She would only then pay the income tax for the IRA, but you will have no tax
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