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My father was recently diagnosed with cancer and has not worked since 2008. He has no income but does hold an IRA, we know we have to dissolve it but no one can tell us what needs to happen to the money. He wants to give it to us since it was to be inheritance once he passes but we want to make sure we follow the rules and don't disqualify him. Any advice or guidance would be great!

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Kat, you don't want to disqualify dad from what?? What is Dad living on if he has no income? Is the IRA a ROTH or traditional? How old is your Dad? Lots of questions, sorry about that!
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Unless your father needs the money to support himself and he is under the age of 70, you don't need to do anything except to check the beneficiary designation and update as needed. After his death, the custodian (bank or investment company) of the IRA will set up a separate account for each beneficiary. Depending on the status of the IRA before your father's death (whether or not it was in payout status), each beneficiary may need to take required minimum distributions annually. These distributions will be taxable to the beneficiaries. The custodian should supply you with the information needed. If your father needs the IRA money for his current expenses, he can make penalty-free withdrawals as long as he is at least 59.5 years old. These withdrawals will be taxable income to him, so it may be best to withdraw the funds over several years. It would be wise to talk to a tax advisor.
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A question for a CPA. At the age of 70 1/2 taxes have to be paid. Unless he needs the money now, I would leave it. If hevis unable to cash it in, a POA will work. As said, Medicaid will look back five years so he shouldn't give it away at this point.
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If you has no income, the best thing to do in terms of taxation is to distribute it under the limit for taxation every year. That way it gets distributed without any taxes needing to be paid.
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It will be taxes as ordinary income whenever it is cashed in by him or his children. If he truly has -0- taxable income, he might pay a lower rate if he cashed it in.
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IRA are considered an asset for Medicaid.
HOWEVER whether it’s considered an “available asset” or a “non exempt asset” depends on IF it is already in pay-out status. How you deal with either is different for each when it comes to Medicaid eligibility.
So is it in pay out mode?
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