How do i show a gift Roth

Forum|Forum|6 years ago
July 14, 2020
4 replies
28 views

I work in Japan so all my income is excluded. I have to pay a penalty on the Roth ($600) since it is larger than my income ($0). My parents gave me the Roth. How can I show that gift income?

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Best answer by mtate1022

Thanks, but I guess I am looking for a tax system that drives people toward good decisions that benefit us all. Retirement investing is GOOD! Having a rule/policy that ends up having people withdraw retirement funds is BAD! Having a rule that interferes with them make the best choices for themselves and opting for what gets them the lowest tax is BAD, FOR ALL OF US. Having a rule that protects us from NOTHING (someone, god forbid, might start a retirement plan, don't you know how wicked that is) and that punishes parents for trying to help their children learn to save for the future is BAD, and punishes the child for listening is BAD!

SusanY1

Level 15

You can't show gift income as it's not taxable, and if all of your income is excluded you cannot have a Roth IRA. You will need to remove the Roth contribution to not pay the penalty. Be sure to request that the financial institution return it as "return of excess contribution" to avoid additional tax and penalties.

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dmertz

Level 15

The deadline for obtaining the return of contribution is July 15, 2020 unless you request a filing extension or file your tax return by the July 15 regular filing deadline, in which case the deadline for obtaining a return of contribution becomes October 15, 2020.