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Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 3453
Experience:  3+ decades of varied tax industry exp. Tax Biz owner
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I just received a 1099-R from my IRA retirement account. My

Customer Question

I just received a 1099-R for withdrawals from my IRA retirement account. My son has had a good income for years, but this past year he was laid off and trouble finding comparable work. He then became ill and had surgery. He needs more surgery and still has medical problems. I offered (he never asked) to help him. I am low income but felt I had to help so that he wouldn't lose everything. The amount of the loan was $85,000 and I paid the 10% tax each time. Now, I am anxious I will be in a different tax bracket and will have to pay tax again which I don't have. Can I use this as a loss (he will pay it back eventually) or because I cannot work because of disability?
Thank you.
Submitted: 1 year ago.
Category: Tax
Expert:  Tax.appeal.168 replied 1 year ago.

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.

Customer: replied 1 year ago.
I am over 59-1/2
Customer: replied 1 year ago.
I am over 59-1
Expert:  Tax.appeal.168 replied 1 year ago.

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;

https://www.irs.gov/Individuals/Payment-Plans-Installment-Agreements

Expert:  Tax.appeal.168 replied 1 year ago.

Hello, I recently became aware that there might have been some technical issues that caused problems with individuals responding or rating my responses. I am checking in to see if you require further assistance with this matter. If not, please be so kind as to positively rate my response 3 or more stars so that I can receive credit for assisting you. Let me know if you experienced problems with responding or rating so that I can report the issue.