Archive for December, 2010
72t Annuity
December 31st, 2010
Question: can you take a 72t distribution with an annuity?
Answer: Yes, as long as distributions are Substantially Equal Periodic Payments, continue for time period specified in IRS pubs. Income will be taxable but no penalty.
Posted in 72t Distribution | 
Tags: 72t annuity, annuity, finance, investing, money, retire, retirement | 
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Ira Withdrawal Advice
December 28th, 2010
Question: I have a question for a advanced professional tax preparer.?
Hello,
I am a newer tax preparer and I have a question about Gifts to family members. I was wondering if a person (my client) who took money out of their IRA to help out a family member with about 10,000 cash could write that gift off on their taxes. Because of this withdrawal of funds, taxes are being calculated as income causing my client to owe the IRS this year. I am hoping for some advice and thank you in advance.
—Thank you to all who answered, I didn’t think she could write it off but I was hoping that maybe I was wrong. She is 80+ and is having a hard time comprehending how she made so much money in 08, but she is not taking into account she had the IRA’s added to her social security.
Answer: No, they cannot write the gift off. But they also fell short of having to pay gift tax, so thank heavens for small favors, right?
Her withdrawal will, indeed, show up as income (on a 1099-R), and, unfortunately, she will have to pay taxes on it (make sure none were withheld at the time of withdrawal).
On another small favor note- when (and if) the family member pays her back, they can pay her back, additionally, any taxes she originally had to pay, and they would still be below the threshold for paying gift tax.
Sorry! I know it’s a bummer when a client does something nice for a family member, but has to deal with even more consequences than giving up the money in the first place.
Hope that helps. :0)
Investment Advice : How Does an IRA Differ From a Mutual Fund?
Posted in IRA Withdrawals |
Tags: 401k, 403(b), advice, advisor, contribution, ira withdrawal, ira withdrawal advice |
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Early Withdrawal Ira Hardship
December 19th, 2010
Question: Can I take an IRA hardship withdrawal without penalty if I lost my job due to foreign competition?
I lost my job. So I rolled over my 401k to an IRA. I took a withdrawal to pay off some debts and now have to pay taxes on it. But am I exempt from the 10% early distribution penalty if I lost my job due to foreign competition? (as defined in Trade Assistance Act)
Answer: no.
However, if you were paying for health insurance then that is one of the items that is exempt. Get with your tax preparer and go down the full list of exempt expenses.
The Ulster Troubles (Part 24 Final)
Posted in Early Withdrawal |
Tags: borrowing, early, early withdrawal ira hardship, ira, rules, withdrawals |
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