My dads trust

[jeff6100]

What is the name of your state? Idaho

I have inheritance money coming from my dad's trust account which is a traditional IRA from Arizona and my question is if they send me a check for my portion of the inheritance cash can i just put in a traditional IRA in my state without having to pay taxes on it until I withdraw portions of it?

Thanks jeff

 

[adjusterjack]

Inheriting an IRA is a bit complicated so don't let them send you a check until you have studied up. There may be a better way to handle it to minimize tax but I don't think you'll be able to avoid tax.

See IRS publication 590b, pages 5 and 8 regarding inherited IRAs.

https://www.irs.gov/pub/irs-pdf/p590b.pdf

See also:

https://www.irs.gov/retirement-plans/required-minimum-distributions-for-ira-beneficiaries

Google inherited IRA. There may be other resources that explain it better.

Or, stick around. There is a tax attorney who participates here that can shed some light on inherited IRAs.

 

[LdiJ]

What is the name of your state? Idaho

I have inheritance money coming from my dad's trust account which is a traditional IRA from Arizona and my question is if they send me a check for my portion of the inheritance cash can i just put in a traditional IRA in my state without having to pay taxes on it until I withdraw portions of it?

Thanks jeff

Is the money coming straight to you from the IRA or is the trust cashing in the IRA and sending you the money?

 

[zddoodah]

I have inheritance money coming from my dad's trust account which is a traditional IRA from Arizona

Wait a second. Is it a "trust account" or is it an IRA? Or did you mean that, while he was alive, your father owned an IRA and designated the trust as the account's pay-on-death beneficiary, and you are a beneficiary of the trust?

Before your question can be intelligently answered, you need to be clear about what exactly is happening.

 

[LdiJ]

I am going to expand a bit on my previous questions. I want the OP to understand why those questions are critical.

If the trust is cashing in the IRA because the trust is the beneficiary, then either the trust is going to pay tax on the IRA distribution or you will if the trust passes it through to you on a Schedule K1. In that instance, there will be no opportunity or ability to roll it over into an IRA of your own.

If you are the beneficiary of the IRA itself, and the money comes to you directly from the IRA, then you would have the opportunity to arrange a direct rollover (where the money never comes through your hands) but there are rules involved.

So, as the above poster said, you really need to understand exactly what is happening before you can get good advice.

 

[ALawyer]

First, my condolences on your loss. Subject to possible changes in the tax laws, if it's a standard (non-Roth) IRA be sure to have the custodian of the funds send them not to you as "cash" but to another custodian to maintain in a tax deferred environment as the funds would be subject to Federal income tax after they are withdrawn from the IRA wrapper (and if Idaho has a state income tax, possibly there'd be state income taxes too). If they stay in an IRA wrapper as an inherited IRA you'll have to withdraw the funds -- formerly on the same schedule your father had to make withdrawals but now under recent tax law changes, over a shorter period. Ask your accountant.

 

[jeff6100]

I am going to expand a bit on my previous questions. I want the OP to understand why those questions are critical.

If the trust is cashing in the IRA because the trust is the beneficiary, then either the trust is going to pay tax on the IRA distribution or you will if the trust passes it through to you on a Schedule K1. In that instance, there will be no opportunity or ability to roll it over into an IRA of your own.

If you are the beneficiary of the IRA itself, and the money comes to you directly from the IRA, then you would have the opportunity to arrange a direct rollover (where the money never comes through your hands) but there are rules involved.

So, as the above poster said, you really need to understand exactly what is happening before you can get good advice.

Thanks for your advice I appreciate it