topic IRA in Retirement tax questions

IRA

Anonymous — Tue, 13 Oct 2020 19:02:24 GMT

If I take a cash disbursement from my IRA, and give that money to my son to buy a house, do I still pay the full income tax on that money?

Re: IRA

macuser_22 — Tue, 13 Oct 2020 19:28:26 GMT

Yes. The tax applies reguardless of what you do with the money.

If you are under age 59 1/2 then there could be an additional 10% early distribution penalty that might be waived for the first $10,000 if the money is used to purchase a first home and all of the other conditions are met.

This assumes you are asking about a Traditional IRA and not a Roth. For a Roth, you can always withdrew your own prion contribution tax and penalty free. The tax and penalty applies to any earnings that are withdrawn.

Re: IRA

DoninGA — Tue, 13 Oct 2020 19:29:18 GMT

do I still pay the full income tax on that money? YES.

Even if you were using the IRA distribution for your own house the distribution is taxable.

Re: IRA

xmasbaby0 — Tue, 13 Oct 2020 20:24:36 GMT

GIFTS

Money that you receive as a gift is not taxable income to you, and you do not need to report it on your income tax return. Money that you gave as a gift to someone else is not deductible for your taxes.

Turbo Tax does not support the gift tax form 709, but here is a link:

https://www.irs.gov/pub/irs-pdf/f709.pdf

https://turbotax.intuit.com/tax-tips/estates/the-gift-tax-made-simple/L5tGWVC8N

https://www.forbes.com/sites/ashleaebeling/2017/10/19/irs-announces-2018-estate-and-gift-tax-limits-11-2-million-per-couple/#3226e75d4a4b