Tax Law (Questions About Taxes)/401k inheritance

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Question
I am 17 year old and my father pasted away in June of last year (2012) and me and my brother are the beneficiaries and we can have a lump sum of 58,000 Aprox. or 200 a month for life, and i have been looking into inherited IRAs, roth IRAs, and rolling the money into my IRA, i was hoping you could give me the best way to get the most money with the least amount taxed. i was looking at inherited IRAs the most and it says something about required minimum withdraws and i was a bit confused, if you could help that would be awesome.

Answer
Hi,

With an inherited IRA you must make annual withdrawals and if it's a Roth IRA it wouldn't be taxable unless the owner of the Roth IRA had not started taking distributions.  I suggest you consult an Enrolled Agent (meaning that they are entitled to represent others to the IRS or a Tax Attorney.

Regards,
Carole

Tax Law (Questions About Taxes)

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Carole Dunton

Expertise

Preparation of individual income tax returns including social security, pensions, lump sum distributions, sale of personal residence, stock and mutual fund sales, distributions from individual retirement accounts, moving expenses and itemized deductions. General knowledge of schedule C for small sole proprietorships. No experience in corporate, estate, partnership or large business returns.

Experience

9 years as tax preparer for major national firm.

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