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I have some question about my inherited 401 k and

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equity/mutual funds liquidation. I want...
I have some question about my inherited 401 k and equity/mutual funds liquidation. I want to buy a house and wanted to use my inheritance, I owe 125 down on an offer to buy a house. My investments, 80k mutual funds, 401k of 42K my mother left me. I am not concerned about the capital gains. Is there any way around the distribution fees if i invest it straight into a piece of property?
Submitted: 2 years ago.Category: Tax
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Customer reply replied 2 years ago
i alos have 50k from a previous employer 401, I am 50 years old
Customer reply replied 2 years ago
i am concerned it should read
Answered in 18 minutes by:
1/5/2016
Tax Professional: Lev, Tax Advisor replied 2 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,693
Experience: Taxes, Immigration, Labor Relations
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To address your main question - if you realize the taxable income - it will be included into your gross income
We may not avoid that by purchasing another property.
As soon as funds from 401k are distributed - that amount becomes taxable.

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Tax Professional: Lev, Tax Advisor replied 2 years ago

So - what we may do - estimate your possible tax liability.
For 401k distribution - the full distributed amount is taxable as regular income

For mutual fund shares - we need to estimate a gain

The basis for inherited assets is the fair market value of shares when your mother passed away.

Then we adjust the basis by any reinvested dividends and distributions.

The gain is calculated as (selling price) MINUS (adjusted basis)

.

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Experts are ONLY credited when answers are rated positively.

If you still have any doubts, need clarification - please be sure to ask.
I am here to help you will all tax related issues.

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