Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax
This answer was rated:

If I (age 40) inherit my fathers retirement through his employer

If I (age 40) inherit...
If I (age 40) inherit my father's retirement through his employer (invested in stocks) how can I get to it with the least tax consequence? Can I roll it over and/or cash in part of it? My father had retired and elected to take 5 annual payments but I am not sure if he lived to receive the first payment, would that election on his part change anything on my part?
Show More
Show Less
Ask Your Own Tax Question
Answered in 11 minutes by:
11/7/2013
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,132
Experience: Taxes, Immigration, Labor Relations
Verified

Lev :

Hi and welcome to our site!
Sorry for the loss of your father.
We need to know the age of your father when he passed away. If he was older than 70 1/2 - and already started required minimum distributions - you might need to continue with these distributions.
Otherwise you have following options:
-- taking the full lump sum distribution.
-- starting periodic distribution based on your age and life expectancy.
-- taking distribution within 5 years.

Lev :

You may not treat that inherited retirement plan as your own (that option is only allowed to spouses) - and may not roll it over to your own IRA or your own retirement plan.
However - you may open co-called "inherited IRA" account and roll funds over to that account - and manage distributions according to rules above.
Generally - if you take large distributions in any single year - that might push you into higher tax brackets - so you might want to plan distributions wisely - and spread it over several years.

Customer:

Father was not 70.5; so can I take some cash and pay taxes and roll over the remainder?

Lev :

If your father was below 70 1/2 - that means - the death occurred before required beginning date. The entire account must be distributed by the end of the fifth year following the year of the owner's death. No distribution is required for any year before that fifth year.
You may decide which amount to distribute in any of these years.

Lev :

You might need to contact the administrator of that retirement account and verify if they allow such distributions. All retirement accounts are different and have different distributions rules.
If that do not allow such treatment - you may open a specifically titles "inherited IRA" - the transfer all funds into that account. That transfer will be not taxable and will be treated as rollover if directly transferred.
Each year you will take money out of that account - the distributed amount will be reported as your taxable income in that year.

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,132
Experience: Taxes, Immigration, Labor Relations
Verified
Lev and 87 other Tax Specialists are ready to help you
Ask your own question now
Ask Lev Your Own Question
Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,132
30,132 Satisfied Customers
Experience: Taxes, Immigration, Labor Relations

Lev is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,310 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,695 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
Suppose my taxable income in 220,000 this year and the tax
Suppose my taxable income in 220,000 this year and the tax rate is X up to 200K, but Y for 200and over, do I pay Y on the full 220K or just that above 200K? … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
What are tax rules for an inherited Roth IRA, GA, the
what are tax rules for an inherited Roth IRA JA: Since estate law varies from place to place, can you tell me what state this is in? Customer: GA JA: What documents or supporting evidence do you have?… read more
Lev
Lev
Tax Advisor
30,132 satisfied customers
I have 160K from an inherited on demand IRA distribution for
Hello, I have 160K from an inherited on demand IRA distribution for 2016. My home is free and clear. My property taxes on it are 14K. I donated 25K to charity. Based upon these figures, I have no othe… read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
723 satisfied customers
Is an inheretance taxable income. What do you want to know?
What do you want to know? My question: is an inheritance a taxable income? … read more
abci168
abci168
Principal
27 satisfied customers
I have an old 457b retirement plan from a county government
I have an old 457b retirement plan from a county government job. I have not worked there in over 14 years. Is it possible to roll the money in it into an existing IRA, or 401k? Dwight, Maricopa, AZ.… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,217 satisfied customers
I took a distribution from an inherited IRA and I'm wonderin
I took a distribution from an inherited IRA and I'm wonderin if I have to make estimated tax payments on that amount? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
I have a summary of my retirement plan balances. MGH says
I have a summary of my retirement plan balances. MGH says they do not owe me the money. It doesn't say projected or estimated, it says my balance as of 12/31/13 is 14, 698.00. Don't they owe me this m… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Retirement Plans S-Corporation has one shareholder. Through
Retirement PlansS-Corporation has one shareholder. Through 2016, retirement plan was a SEP and the only qualifying employee was the shareholder. As of September 1, 2017 another employee will qualify f… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
I am trying to find out about a retirement plan Tax code
I am trying to find out about a retirement plan Tax code 702j retirement account? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,458 satisfied customers
Undistributed taxable income previously taxed. Have 3
Undistributed taxable income previously taxed. Have 3 shareholders with balances due to them from previous years. Can it be paid all in one year to bring their amounts owing to zero until the next pro… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,217 satisfied customers
Generally, 403()9 church retirement plans are not subject to
Generally, 403(b)9 church retirement plans are not subject to SECA taxes on ministerial salary reduction contributions. In other words, ministers will save almost 15 percent in SECA taxes by using a c… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,217 satisfied customers
Ex-wife inherited retirement account from TIAA, would rules
Ex-wife inherited retirement account from TIAA, would rules under ERISA prevent creditors from reaching it? Can IRS reach it to pay decedent's back taxes owe and the taxes owe in the last income tax r… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Rules on Rollovers (Return of a non-taxed IRA Distribution).
Rules on Rollovers (Return of a non-taxed IRA Distribution). Over 70-1/2 years old) … read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
I contributed 18000 dollars to my 403b retirement plan by
I contributed 18000 dollars to my 403b retirement plan by June 30, 2017. From July 1, 2017, I am eligible for a matching contribution from my employer upto 5%. Given the annual limit of combined contr… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
If you do not work, retired, and receive no taxable income,
If you do not work, retired, and receive no taxable income, do you have to file a tax form… read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
723 satisfied customers
I have a question regarding my retirement plan, I was
I was wondering what kind of or how much tax penalties I will get if I withdraw my money before the pre-set age. … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
In Pennsylvania, a have a retirement plan administered
In Pennsylvania, a have a retirement plan administered through Metlife. On the tax form they ask about classification and if it is qualified. … read more
Lev
Lev
Tax Advisor
30,132 satisfied customers
Have you had any distributions from a retirement plan after
Have you had any distributions from a retirement plan after 2013 and before the due date of your 2016 return?....... the due date is that the deadline of April that they are referring to when asking t… read more
Mark D
Mark D
Enrolled Agent
Master's Degree
1,300 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x