Early Withdrawal

Posts Tagged ‘ira withdrawal penalty’

Question: Deadline for inherited IRA required minimum distribution – was it Dec. 31, 2010?

If a nonspouse inherited an IRA several years ago and took RMDs on schedule but did not withdraw an RMD for 2010 before December 31, 2010, does that constitute a failure to withdraw for the year, triggering the 50% penalty? Or can the inheritor still make the withdrawal for 2010 before April 18, 2011? Inheritor was born after decedent, decedent was well over 70 1/2 at time of death, initial RMD was taken properly and inherited IRA is traditional, not Roth, if any of that makes a difference. Thanks.

Answer: Yes, the deadline for RMDs in any given calendar year is Dec 31. And, failure to satisfy said RMD is 50% of the shortfall. That said, you can still request a waiver of this excise tax. Here’s a link to an explanation you might find helpful.

Good luck!

http://www.ehow.com/how_2165537_irs-penalty-late-rmd-distributions.html

PS – it may be wise to put your RMD on auto-pilot with the IRA custodian so this can’t happen again. It’s a simple form.

IRAKLIS OLYMPIAKOS 2-1 TO PENALTY

Harbor Financial Introduction

Question: For an early IRA withdrawal for higher education what expenses are allowed that do not incur the 10% penalty?

This would be for my children who are full time students at qualified univerisites.
I understand an IRA can be used for higher education and not incur the 10% penalty for some expenses…but what?
Is room and board allowed if off campus?
What about room and board in my house?
Books?
Supplies?
Transportation?

Answer: Qualified higher education expenses means tuition, fees, books, supplies, and equipment required for enrollment or attendance at an eligible educational institution. If the beneficiary is at least a half-time student, certain room and board expenses may also be qualified higher education expenses. The maximum room and board allowance is the amount applicable to the student in calculating cost of attendance for financial aid purposes, or, in the case of a student living in housing owned or operated by the eligible educational institution, the actual amount charged the student by the educational institution for room and board.

Self-Direction — Can MY SD IRA/401K Purchase Property I Already Own?