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About John Stancil, CPA
Expertise
I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I teach tax and accounting at a small church-related college. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a part time tax practice for over 30 years. I am a member of the AICPA, National Association of Tax Professionals, and the Institute of Management Accountants. Visit my website at www.johnstancilcpa.com. Also visit my blog, www.thetaxdocspot.com.

Experience
I hold a doctorate in Accounting, and four professional certifications: CPA, CMA, CFM, and CIA. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I write a monthly tax column for the local newspaper. I have prepared taxes for over 30 years.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill College

You are here: Experts > Business > Corporate Law > Tax Law (Questions About Taxes) > Question regarding IRA distribution and gifting

Tax Law (Questions About Taxes) - Question regarding IRA distribution and gifting

Expert: John Stancil, CPA - 11/5/2009

Question
My retired father (age 68) has various IRA accounts. He thinks it's a waste to let the money sit there when his children could use him and pay a monthly allowance. He proposed withdrawing 50K from one account and giving the money to me. I think it's an unwise move because he might be taxed and I imagine I will be as well. He also suggested "gifting" it to me, but my understanding is he could only gift up to $13K without he nor I getting hit with taxes. Please advise on both ideas. Thank you for your time.

Answer
Angelina,

Thanks for your question.

Any withdrawal, regardless of what he does with the money is subject to income tax.

He can give you up to $13,000 per year without any gift tax consequences. Any gift in excess of that amount is considered a taxable gift, and a return must be filed. However, he has a lifetime exemption of $1,000,000 so not tax would be due unless he has exceed the lifetime limit.

Hope this helps.

John Stancil, CPA

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