AboutWillard R. Brumbaugh, LUTCF Expertise I have answered many questions regarding 401ks, IRAs and annuities as well as life insurance.
I have been counselling against most Qualified Plans since 1994.
Experience Ranked in the top 5 in retirement catagories at Askme.com most of its last 2 1/2 years. Organizations I belong to:
National Association of Insurance and Financial Advisors-California
Inland Empire Estate Planning Council
Education/Credentials Life Underwriters Training Council Fellow
Question I am in the process of transferring my mom's IRA into her checking account to help pay for her care. Mom is 87 years old with late stage Alzheimer's. I have Power of Attorney so this is not a problem. She has a monthly non-taxable income of $2,430.00. Her IRA is $9,700.00. She takes the yearly (every Oct.) RMD of $679.31. My question is, never having paid taxes on this money, will she be taxed upon full withdrawal? Keep in mind she is 87. Do I need to take out withholding taxes? We are in California. Thank you
Answer Dear Loretta,
Her age has no influence on the tax status of her IRA. I believe that you might be wise to move only half of the IRA into her checking account in 2009, the remainder next year. There is no need to withhold taxes since you can simply retain the tax in her checking account.
