Posted on 04/22/2018 12:37:24 PM PDT by lee martell
Withdraw it is about it. They will get their money, one way or another (SS witholding, payroll witholding, tax refund witholdings, etc) and the interest/penalties are steep!
I inherited $45,000 from my fathers estate last year and did not have to pay anything to the IRS (Federal Government). Only had to pay 4% tax to the state of Pennsylvania.
You have some very good points.
I do stay on top of the repayment schedules.
After decades of being (what I used to think of as) Artful Dodger, I realize it’s best just to make a payback arrangement and stick to it. I stopped trying to run away from the lingering debts. Too stressful.
Seriously.
Was that 4% tax taken out before you received your $45K?
Or did you have to make that happen on your own?
If you don’t mind my personal question.
No disrespect intended but from the ?’s you ask indicate you can and will be guided in the wrong direction due to a lack of solid unbiased “knowledgeable” info.
This aint the place
You need to spend a few bucks on a CPA schooled in IRA and Retirements.
“Ed Slot” has a web sight that will/may head you in the right direction?
USAA (all us Military types love them) has a financial planning wing of the organization that may guide you for free.
You owed nothing on the inheritance from the sis and will not going forward unless it was in an IRA. If so than you’ll need guidance.
This.
Wait a minute.
You got $20.000 bucks?
Can we be friends and travel together?
I’ve thought about Cobalt or Titanium Futures. But not on my budget. Thinking about it is not always actually doing. The potential for gain is high.
I’m not nearly ready for the Margin Calls on such Options and may never be.
As I understand your question, you are concerned that the lender in the case of your outstanding student loan could call the loan. And thereby somehow attach this inheritance. The specific answer to your question is to look at the documents for your loan and determine whether that loan is what is known as callable. I would imagine it is not callable, unless you default, IE stop making payments; in which case the typical action of a lender is to declare the loan in default and to make a claim for the entire unpaid balance in one form or another. So the answer is if you keep making payments, then the inheritance is not vulnerable. There is probably no simple way to Shield that inheritance from the actions of a lender who declares your loan in default. There are ways to do it but they are not especially above-board.
In regards to minimizing the effects of IRS on your inheritance.
Take your distribution check and cash it at the bank it was drawn on or go to one of them check cashing places.
I appreciate the advice.
For that amount of money, you should hire a tax specialist. Depending on FR advice would be foolish, even if well-intentioned.
No it wouldn’t. You should do some research.
Time for a RV and a Road Trip!
I’ve always wanted to see the Grand Canyon and Mount Rushmore, before the libs start trying to destroy the faces on Rushmore due to ‘PC crimes’.//
My next stop would be to ask someone at the Navy hospital to refer me to an advisor.
—
And by advisor, I’m presuming you mean a tax advisor or accountant. My simple advice; play it straight up with the accountant. Explain your situation fully. Then it is up to them to provide the best legal tax advice.
No funny accounting games, please! We’re not Leftists.
I have been a tax preparer for 8 years and an Enrolled Agent for 4 years. Your full retirement age for Social Security if 66 years and 4 months if you were born in 1956.
Need to know the age of the sibling on the date of death and what type of income was inherited.
If your sibling was under 70.5 and you inherited a traditional IRA, you can take the RMD (Required Minimum Distribution) in a lump sum or over 5 years.
If the sibling was over 70.5 and you inherited a traditional IRA, you can take the RMD either using your sibling’s age or your age.
If the income was stocks, you can use stepped up basis to decrease the gain. Basis is the Fair Market Value (FMV) at date of death but the acquisition date is still the date that your sibling bought the stock. This gives you a lower gain and long term capital gains tax treatment.
If the income was in a ROTH IRA and the account was set up for at least 5 years before the siblings death, the income will not be taxable.
If the income was savings or checking (not in a deferred compensation plan such as a traditional IRA, 401k, 403b, 457, etc), it will not be taxable.
You might elect to refuse or disclaim a bequest made to you and have it pass to the next beneficiary such as a child or sibling.
I’ve done this with life insurance policies in very large estates where the spouse was the beneficiary and the children were the secondary beneficiary. Was better than having it taxed when the spouse died.
“Have you contacted an enrolled agent? That should be your first step.”
I don’t trust the advice of most enrolled agents. Especially if they were formerly IRS collections agents.
The problem with IRS debt is that it never goes away, and the late penalties and interest make it grow faster than most can pay it off.
The best thing you could do is make a deal with the IRS (which they do daily) for a short payoff and use your inheritance for that.
The only way out of IRS debt is to pay it off. Otherwise it will be larger every year even as you make payments.
Or, go completely underground, don’t use banks and only work for cash. That’s a crappy life too.
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