Have a Tax Question? Ask a Tax Expert
Q1: Can I use this as a loss (he will pay it back eventually) or because I cannot work because of disability?
A1: Unfortunately you cannot. The distributed amount from the IRA is taxable as ordinary income. If you're younger than 59-1/2 years old, the 10% early withdrawal penalty applies. You likely will be bumped up to a higher tax bracket. While it is understandable why you wanted to help your son, there is not a way to get around paying the additional tax associated with the withdrawals.
Let me know if I can be of further assistance to you regarding this matter.
The 10% early withdrawal penalty is not applicable since you are over 59.5 years of age, however, the distributed amount will still be taxed as ordinary income. If you don't have the funds to pay the taxes dues, you can request to placed on an installment agreement payment plan. You can read more about that at the following link;
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