My 22 year old grandson was a full time student until graduation in May of this year. His parents paid his tuition and living expenses until graduation, but will NOT claim him as a dependent. He got a full time job in June and pays more than 50% of his expenses from that point forward. He has a $30,000 inherited IRA from his grandmother. Since his income will be lowest this year (i.e a half years salary) he planned to withdraw the full $30,000 (unearned income) and move it into a regular savings account hoping or expecting he would only be subject to his own marginal tax rate. Is this correct or would the "kiddie" tax apply in this situation? Note: his grandmother was not taking RMD's before she passed away.
