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I am a US Citizen living and working int he Uk for the last…

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I am a US...

I am a US Citizen living and working int he Uk for the last 18 years. I am receiving a inheritance IRA from my mothers estate in the US. I've been told from her advisor that I need to set up a inheritance IRS in the US to transfer the funds into. I'm trying to understand my options.

Accountant's Assistant: The Accountant will know how to help. Is there anything else important you think the Accountant should know?

Not sure the details the accountant would need to know.

Submitted: 4 months ago.Category: Tax
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3/20/2018
Tax Professional: Robin D., Senior Tax Advisor 4 replied 4 months ago
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 18,217
Experience: 15years with H & R Block. Divisional leader, Instructor
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Hello, I'm Robin. Welcome to JustAnswer. I'm reviewing your question now and typing up my reply. I'll post that in just a few moments.

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Tax Professional: Robin D., Senior Tax Advisor 4 replied 4 months ago

If you set up the inheritance IRA as suggested then you have more time to take the money out. This means you are not taxed yet on the IRA but when you withdraw. You will need to withdraw within 5 years time all the amount.

Your other option is take the distribution now, have tax withheld and then invest where you want.

Depending on your mother's age you may need to take out Required Minimum Distributions (RMD). Beneficiaries of inherited IRAs can choose to take distributions as an RMD over the course of their lifetime (what’s known as the life expectancy method), over a five-year period or as a lump sum.

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Customer reply replied 4 months ago
If i took a distribution now, Tax withheld would be at 30% or would it be at my current tax level?
Tax Professional: Robin D., Senior Tax Advisor 4 replied 4 months ago

You are not a foreign person so 30% is not required. As a US citizen you are not taxed higher just because you are outside the US. They would generally withhold 20%.

You will pay tax at your regular rate for US tax.

Please let me know if you need more information.
If not then please scroll up to see the STARS to rate so I am credited. Thank you in advance

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Tax Professional: Robin D., Senior Tax Advisor 4 replied 3 months ago

Just checking to see if you responded

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