Do I have to pay taxes on an IRA withdrawl if I give it away?
September 15, 2006
Date: Thu, 10 Aug 2006
From: Janice
Hi,
If I make a withdrawal from a traditional IRA account and give the money to my mother as a gift, do I have to report taxable income from the withdrawal? Would I responsible for paying income taxes on it?
Any advice would be greatly appreciated!
Thank you,
Janice
Answer
Date: Wed, 06 Sep 2006
Hello Janice,
Giving the money to your mother doesn't shift the income tax burden to her. The IRA is personal to you. Any amounts that you withdraw from it will be taxable to you. Remember penalty taxes can apply if you withdraw funds from an IRA before reaching age 59 1/2.
Good luck!
Mike Gray
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