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Ask Tax.appeal.168 Your Own Question
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 3509
Experience:  3+ decades of varied tax industry exp. Tax Biz owner
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I have a substantial amount of money in an account in an IRA.

Customer Question

I have a substantial amount of money in an account in
an IRA. If I wish to give mychildren this now raher that
after I did would I or they have to pay taxes on it. The
account was created as an account for myself and two children
Submitted: 5 years ago.
Category: Tax
Expert:  Tax.appeal.168 replied 5 years ago.
Hello, THANK YOU for choosing Just Answer. My goal is to help make your life...a little...LESS taxing.

In order to better assist you, I need to know the following;

1) Is it a traditional or a Roth IRA?

2) Are you under the age of 59-1/2 years old? or

3) Have you reached 70-1/2 years old?

Customer: replied 5 years ago.



1. Traditional IRA 2.no3.yes

Expert:  Tax.appeal.168 replied 5 years ago.
Hello again,

As a person is required to take minimum withdrawals once they reach the age of 70-1/2, as to when the distributions are made would be a personal choice. Regardless to when funds are distributed, - the withdrawal amount will be taxable.

If distributed after your death - that amount will be taxable to your estate and generally the tax liability will be passed to your beneficiaries. You may want to consider planning distributions accordingly, spreading them over several years to avoid large taxable income.

Customer: replied 5 years ago.

Let's us say I intend to draw money from

my investments and gift my children an

amount each year. Is there a limit on the

amount I can gift them below which I will not

be taxed?

Expert:  Tax.appeal.168 replied 5 years ago.
Currently you can gift any one person $13,000 per year without creating a taxable event. You can however give a gift in excess of the $13,000 to any one person, but you will have to complete a Form 709 Gift tax Return.
Tax.appeal.168 and 3 other Tax Specialists are ready to help you
Expert:  Tax.appeal.168 replied 5 years ago.
Thank you.

In addition, please note that a person has a $5 million lifetime estate tax exemption to offset any gift taxes.