My son (12) is inheriting a modest Beneficiary IRA from a relative.
I am trying to make out how best to proceed. I am a single dad, and I will be paying for my son's college.
I need to know things like:
- Does it make sense to cash in just enough when he is 18 to not trigger income taxes for him, as he will not be working then (just going to college)? (and to repeat this when he is 19, etc)
I want to avoid any taxes now, as that might trigger kiddie tax (his mother has custody, but she makes half of what I make, so any cash event for the Ben. IRA could be expensive for him/me/her)
- When does the 10 year rule start? When he is 18?
Also, because it was my mother who passed away, I am the one setting up the Ben. IRA, etc.
So, can - I - be the custodian of my son's Ben. IRA account (and invest it properly) until my son is 18?
Or does the custodial parent HAVE to be the custodian of the account?
I tried to find a CPA to answer these questions, but they just want to do my taxes, not answer simple questions like this...
Thanks.
Mac
