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I have an non spousal inherited IRA and the company just…

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Second opinion] I have...

Second opinion] I have an non spousal inherited IRA and the company just liquidated the account and sent me a check. They said I had 180 days to let them know if I wanted to liquidate or roll over into an inherited IRA. Since I did not let them know they liquidated it and I am devasted because of the tax implications.

Accountant's Assistant: The Accountant will know how to help. Is there anything else the Accountant should be aware of?

I will also lose my healthcare subsidy ( I will have to pay back 22 Thousand that I recd this year, because I recd the check for 145 Thousand.

Submitted: 8 months ago.Category: Tax
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11/20/2017
Tax Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 8 months ago
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Tax
Satisfied Customers: 2,641
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
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Hello, I understand you have requested a second opinion.

Unfortunately, the company gave you notice and when they did not receive a response they disbursed the funds.

If the funds have been disbursed then you either have to pay the required taxes or disinherit/ disclaim the IRA distribution.

If the distribution is for $145,000 you would generally owe 28% tax if you are a single tax filer. This would result in approximately owing $40,600 in Federal tax.

___

This would leave you with approximately $105,000 left from the distribution. Would this be enough to cover your health care subsidies for one year?

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Tax Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 8 months ago

Therefore your options are to disclaim the IRA distribution and pay no taxes

OR

Receive the distribution, pay the taxes and be with a lump sum of approximately $100,000.

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Tax Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 8 months ago

I would be happy to discuss any follow up questions you may have!

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Tax Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 8 months ago

I would be happy to answer any follow up questions you may have.

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