Gift Tax from IRA

[missdee7]

What is the name of your state? Michigan
What are the tax liabilitys if I give my adult child money under the gift tax law and the money is taken from my IRA ?

[tranquility]

How old are you? How much are we talking about? What will he use the money for? What kind of IRA is it? How much have you given over your lifetime? Are you receiving medicare or any other government payments right now? What is your basis in the IRA? Do you have more than one IRA? How long has the money been in the IRA?

How....well, you get the point.

[missdee7]

-I am 62 yrs old
-The maximum of $11,000
-She will use the money to pay off student loans (my Grandson) and additional bills
-My 401K was rolled over to an IRA after I retired
-I have not given anything
-I do not receive Medicare
-My Social Security payments will start in September
- I don't understand the questions of my basis in the IRA ??
-I only have one IRA account
-The money has been in the IRA for three months




-Quote-
How old are you? How much are we talking about? What will he use the money for? What kind of IRA is it? How much have you given over your lifetime? Are you receiving medicare or any other government payments right now? What is your basis in the IRA? Do you have more than one IRA? How long has the money been in the IRA?

How....well, you get the point.

[tranquility]

The question on basis gets to the other question you didn't answer directly, what type of IRA. However, since you rolled into the IRA from a 401K, the IRA is traditional.

Since you are over 59 1/2, you will not have a penalty in your withdrawal, so we don't need to get into any exceptions. Since there is not a medicare or other government lien on you you can make a gift without the taint of fraud. You are not up against any lifetime limits and the amount is below $12,000, so no gift tax return is required.

The distribution from the IRA is taxable income to be included in your AGI.

[missdee7]

Thanks for your help