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dgosai
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Can I gift up to the limit of $14,000 from Traditional IRA account. I am over the 591/2 years of age. Will I have to pay report the withdrawal as income?

 
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4 Replies

Can I gift up to the limit of $14,000 from Traditional IRA account. I am over the 591/2 years of age. Will I have to pay report the withdrawal as income?

Who will be receiving this gift?  A specific individual or to a recognized charitable organization?

Can I gift up to the limit of $14,000 from Traditional IRA account. I am over the 591/2 years of age. Will I have to pay report the withdrawal as income?

With the exception noted below, any withdrawals [also known as "distributions") from an IRA account must be received by the living owner of the IRA account [obviously, inherited accounts are different!).  When a distribution of "pre-tax" monies are made from an IRA account [note, not relevant to ROTH IRA if held for minimum term], the monies are all considered "ordinary income" by the IRS and taxed at ordinary income  tax rates.  States that followed the Federal regulations and did not tax the money when it was earned and contributed to the IRA also will assess tax.

Once the IRA owner has received the monies, the owner is free to GIFT up to $14,000 in one year without exposure to GIFT TAX (Form 709) to any one individual, and similarly to as many other individuals as the owner chooses.Thus a parent could gift $14,000 to each child and also to each child's spouse, for example.

So in answer to your question, it makes no difference whether you give monies out of your bank account or from distributions out of an IRA.

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EXCEPTION - QUALIFIED CHARITABLE DISTRIBUTION:
An IRA account owner may instruct the account's trustee [such as the brokerage or bank where the account is held] to directly distribute monies from the account to a registered charitable organization.  The distribution can be used to count against the Required Minimum Distribution, if the RMD has not already been met, but since the distribution is not assessed tax, it cannot then be reported on Schedule A Itemized Deductions as a Charitable Donation because that would be double counting.

If this posted response is useful to you, please click on the upraised hand in the lower left of this post. Thank you. Scruffy Curmudgeon--PFFM/ IAFF, retired FireFighter/Paramedic - Locals 718/30, Veteran USAR O3 AIS/ASA '65-'67


NOT INTUIT EMPLOYEE
USAR 64-67 AIS/ASA MOS 9301 - O3

- Just donating my time
**Say Thanks by clicking the thumb icon in the lower left corner -it means nothing but makes those than answer feel wanted.

Can I gift up to the limit of $14,000 from Traditional IRA account. I am over the 591/2 years of age. Will I have to pay report the withdrawal as income?

Note: that the QCD exception requires that you be 70 1/2 or older not just over 59 1/2.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

Can I gift up to the limit of $14,000 from Traditional IRA account. I am over the 591/2 years of age. Will I have to pay report the withdrawal as income?

ty for filling that in
If this posted response is useful to you, please click on the upraised hand in the lower left of this post. Thank you. Scruffy Curmudgeon--PFFM/ IAFF, retired FireFighter/Paramedic - Locals 718/30, Veteran USAR O3 AIS/ASA '65-'67


NOT INTUIT EMPLOYEE
USAR 64-67 AIS/ASA MOS 9301 - O3

- Just donating my time
**Say Thanks by clicking the thumb icon in the lower left corner -it means nothing but makes those than answer feel wanted.
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