I have 2 inherited IRAs and several mutual funds but I am cash poor and would like to cash in another of his IRAs this year. I just don't know how to deal with it in the right way.
You will pay ordinary income tax on it, based on the tax bracket you are in.
"if the taxpayer receives distributions directly from the inherited IRA, the distributions are taxed, but the 10% penalty tax on premature withdrawals does not apply, even if the beneficiary is under the age of 59 1/2 ."
The purchase of a home in your case does not matter, as the 10% penalty will not apply to you anyway.
Enter the 1099R for 2016. It should have a Code of 4 in Box 7. You will see the total tax impact.
To enter 1099R in TurboTax:
1099RTo enter pension and annuity Payments (1099-R)
What if I cashed in a ROTH IRA that was in my name but I only kept the interest and reinvested the original contribution? (That's what I was advised to do. Again, to get funds for the house purchase.) Thank you!
For a Roth, please look at this link, if this does not answer, please post a new question with some more facts in it. Thank You <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/replies/3301082">https://ttlc.intuit.com/replies/3301082</a>
You will pay ordinary income tax on it, based on the tax bracket you are in.
"if the taxpayer receives distributions directly from the inherited IRA, the distributions are taxed, but the 10% penalty tax on premature withdrawals does not apply, even if the beneficiary is under the age of 59 1/2 ."
The purchase of a home in your case does not matter, as the 10% penalty will not apply to you anyway.
Enter the 1099R for 2016. It should have a Code of 4 in Box 7. You will see the total tax impact.
To enter 1099R in TurboTax:
1099RTo enter pension and annuity Payments (1099-R)