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Tax Law (Questions About Taxes)/IRA Transfer to pay off a Morgage in trust


My sister passed away in April of 2011. She had placed all of her property in a trust.  There was a significant mortgage on her home. She also had 2 IRA's.  Can the trustee transfer the money from the IRA to pay down the mortgage? Would there be penalty tax for withdrawal of the IRA or just income tax to the trust?  Is there any other approach you would suggest?


Thanks for your question.

There would be no penalty on the withdrawal if the withdrawals were qualified.  As an inherited IRA you may make penalty-free withdrawals, but must abide by the withdrawal rules.  They get rather complex due to varying situations. This link will give you an overview of the withdrawal rules for an inherited non-spousal IRA.

Hope this helps.

John Stancil, CPA

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John Stancil, CPA


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 am Professor Emeritus at Florida Southern 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 CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at I also offer seminars and consultations to churches and clergy on their tax issues at Also visit my blog, I am listed on Tax Connections at Prepare and file your own taxes at


I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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