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Gift Tax

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Karkel01

Junior Member
What is the name of your state? Arkansas.

My mother (69 years old) has money in a traditional IRA which she wants to gift to myself, wife, and two kids..... $12,000 to each. My understanding is that I would not have to pay any income tax on that $12K, but would she be levied a penalty for withdrawing from her IRA before 70.5, if it's in the name of "gifting?"

Thanks

What is the name of your state?
 


abezon

Senior Member
No penalty because she's over 59 1/2. The withdrawal would be taxable income to her, then she could gift it to you. She might need to withdraw about $55k to have enough to pay the taxes on the IRA & social security. She should discuss it with her tax advisor for specifics.
 

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