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When you inherit an IRA, you have options like taking a lump sum, setting up an inherited IRA, or liquidating it over time. Consider tax implications and your financial goals before deciding. Consulting a financial advisor can help you make the best choice for your situation.
What else can I help you with?
What are the key differences between a beneficiary IRA and an inherited IRA?
The key difference between a beneficiary IRA and an inherited IRA is that a beneficiary IRA is set up by the original account owner to designate a specific person to inherit the funds, while an inherited IRA is created when someone inherits an IRA after the original account owner passes away.
How do I set up an inherited IRA?
To set up an inherited IRA, you need to contact the financial institution where you want to open the account and provide the necessary documentation, such as the death certificate of the original account holder. You will also need to designate beneficiaries for the inherited IRA.
Can you transfer an inherited IRA to another beneficiary?
Yes, an inherited IRA can be transferred to another beneficiary through a process called a "trustee-to-trustee transfer" or a "direct transfer." This allows the new beneficiary to continue the tax-deferred status of the IRA.
Can you use the full amount of an inherited IRA account to purchase a home and what are the tax penalties for pulling out the money?
The tax laws on this change very often, you will need to consult a CPA or an attorney. An inherited IRA is just inherited money. You have to have a work history to have an IRA. It is not transferable from one person to the next. Inheritance taxes will come into questions. When all is said and done, you can purchase what you want, after the taxes are paid.
Should I convert my IRA to a Roth IRA?
Opinions on changing your standard IRA investment to a Roth IRA vary on who you ask. www.smartmoney.com/.../should-i-convert-my-ira-to-a-roth-ira is an excellent website for information.
What is the difference between a stretch IRA and an inherited IRA?
A stretch IRA minimizes account distributions by prolonging the tax-deffered status throughout several generations of your family. An inherited IRA is the IRA that is left to a beneficiary after a person holding an IRA passes away.
What are the key differences between a beneficiary IRA and an inherited IRA?
The key difference between a beneficiary IRA and an inherited IRA is that a beneficiary IRA is set up by the original account owner to designate a specific person to inherit the funds, while an inherited IRA is created when someone inherits an IRA after the original account owner passes away.
What are the rules of an inherited IRA?
There are several rules that go along with an inherited IRA. One rule is that the inherited IRA must be retitled. Another rule is that the beneficiary must begin taking distributions the year after the owner dies by December 31st.
Would assets in an inherited ira be protected from creditors in a chapter 7 bankruptcy?
No the IRA would no longer be protected having been inherited.
How do I set up an inherited IRA?
To set up an inherited IRA, you need to contact the financial institution where you want to open the account and provide the necessary documentation, such as the death certificate of the original account holder. You will also need to designate beneficiaries for the inherited IRA.
Can Inherited Roth IRA be merged with existing Roth IRA?
No, the inherited funds (beneficiary IRA) have to remain in inherited (beneficiary) form. So the account/funds can only be distributed out of the beneficary IRA as a distribution or transfer to another alike roth beneficiary account at another firm. However, the deceased account can be transferred into the surviving spouse Roth IRA (or transfer to a beneficiary IRA account). A non-spouse doesn't have this option- they can only transfer to their beneficiary IRA account that they opened.
Can you merge a beneficiary IRA with regular IRA?
The beneficiary form on an IRA is the first and most important part of receiving an inherited IRA," said Matthew Curfman, a senior vice president at Richmond Brothers Financial Management Specialists. "If you fail to name a beneficiary on your IRA it is highly likely that your beneficiaries will not be able to 'stretch' the inherited IRA over their life.
Can you transfer an inherited IRA to another beneficiary?
Yes, an inherited IRA can be transferred to another beneficiary through a process called a "trustee-to-trustee transfer" or a "direct transfer." This allows the new beneficiary to continue the tax-deferred status of the IRA.
Should I take a lump sum or not on an inherited IRA?
Depends....if you want to get hit with taxes and all. Best to consult with a tax/financial advisor.
Do distributions from an inherited IRA qualify for the NYS pension and annuity exclusion?
No, distributions from an inherited IRA do not qualify for the New York State pension and annuity exclusion. This exclusion is generally meant for certain types of retirement income received as a pension or annuity from an employer's retirement plan, not for inherited IRAs.
Can you use the full amount of an inherited IRA account to purchase a home and what are the tax penalties for pulling out the money?
The tax laws on this change very often, you will need to consult a CPA or an attorney. An inherited IRA is just inherited money. You have to have a work history to have an IRA. It is not transferable from one person to the next. Inheritance taxes will come into questions. When all is said and done, you can purchase what you want, after the taxes are paid.
Should I convert my IRA to a Roth IRA?
Opinions on changing your standard IRA investment to a Roth IRA vary on who you ask. www.smartmoney.com/.../should-i-convert-my-ira-to-a-roth-ira is an excellent website for information.
