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Inherited Ira question?
Father passed away. Left Ira with beneficiary's. Three to be specific. Myself son and my two sisters. Each a third. Do i have the right to cash my out. Even if they don't want to cash there out. Meaning they can't tell me what to do with mine nor can the financial institution. If they don't want to cash there share out this is there right. But do i have to right to cash my share out if i want. I understand i will have to pay income tax but if i read correctly the 10 percent penalty will be waived under no spousal inherited. Thanks.
yes i understand it will be taxed as ordinary income. It might also change my tax bracket for lump distribution. Thanks everybody
3 Answers
- ?Lv 72 years agoFavorite Answer
Your father's account will be split into 3 separate accounts. Each person can do what they wish with theirs.
- Anonymous2 years ago
Talk to the IRA custodian. They will require you to open an Inherited IRA account and then they will deposit your share into it.
Yes you can withdraw your funds in full if that is what you wish to do. You are correct that there will not be a 10% penalty to withdraw (presuming your dad was over the age of 59 1/2.
Make sure you understand the tax implications of withdrawing it as a lump sum in one year.
If you choose to leave the money in the Inherited IRA, be aware that it is subject to RMDs (required minimum distributions). You will need to calculate how much you are required to withdraw annually based on your own age. Of course this is a non-issue if you withdraw it all upon receiving it.
- ?Lv 62 years ago
Eva is right. Have the financial institution split it into 3 accounts. However, If you don't need all the money today, don't cash it all. You can let it grow tax deferred and take it out when needed. The financial institution can explain the withdrawal rules or you can read them yourself on www.irs.gov. I am sorry you lost your father.
