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My father (who is not a US Citizen and never lived nor

worked in USA) but has...
My father (who is not a US Citizen and never lived nor worked in USA) but has a retirement account in USA and has named me as beneficiary of this account. Since my father expired recently, I want to cash out his retirement account around $64000 into my checking account. I currently live in USA and a permanent resident of USA. Kindly let me know if I have to pay any inheritance taxes or gift taxes to USA and state of Virginia. I am sure about filling form 3520 next year when I file 2018 income taxes apart from which will there be any federal or state taxes to file from my side?
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Answered in 17 hours by:
3/11/2018
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Tax
Satisfied Customers: 2,765
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
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Funds dispersed from a tax deferred retirement account are taxable to the beneficiary of the distribution at the beneficiaries ordinary income tax rate.

There is not a gift tax or an inheritance tax, but you will add the $64,000 to your ordinary income and pay state and federal income tax on the disbursement.

Please let me know if this has answered your question or if you have any additional questions.

When you have no further questions a positive rating of 5 stars is much appreciated.

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Customer reply replied 5 months ago
Why will $64000 be added to my income which is provided to me from my father's account?

Because money in a tax deferred retirement account have yet to be taxed.

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If the account was funded with post tax dollars then you would not be taxed.

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Additionally, you are not required to disperse all of the funds in one year. You are able to spread out the distribution.

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Please let me know if this has answered your question or if you have any additional questions.

When you have no further questions a positive rating of 5 stars is much appreciated.

Thank you!

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Please let me know if you have any additional questions that I may assist you with concerning taxation.

Thank you

Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Tax
Satisfied Customers: 2,765
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
Verified
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