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#5
02-03-2004, 12:32 AM
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 Re: Roth IRA question D. Stussy" <kd6lvw[at]bde-arc.ampr.org> wrote: - quote - > No. Earnings will be non-taxable too.
Thanks to all who responded. So the Roth will continue totreated as a Roth (tax-free) to the granddaughter, only she must follow IRA rules as to when and how she receives the money. -HW "Skip" Weldon Columbia, SC << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#4
01-28-2004, 10:35 PM
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| Re: Roth IRA question L. T. Portella wrote: - quote - > "HW "Skip" Weldon" <skip5700removethis[at]hotmail.com> wrote:
No. Earnings will be non-taxable too.> > Grandmother sets up Roth for self, naming granddaughter as > > beneficiary. At grandmother's death, granddaughter can take > > lump-sum withdrawal income tax free. > > > Alternatively, granddaughter could elect lifetime > > withdrawals using granddaughter's life expectancy. That > > leaves the bulk of the account to grow tax-deferred. > > > With that lifetime payout election granddaughter's basis > > would be the value of the account as of the grandmother's > > passing, meaning part of each payment would be principal, > > part taxable interest. Correct? > If you receive an authoritative reply please let me know. I > have asked the same question several times and the general > consensus is that all the payments received by the > granddaughter are principal and NOT taxable. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#3
01-27-2004, 10:52 PM
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| Re: Roth IRA question "HW "Skip" Weldon" <skip5700removethis[at]hotmail.com> wrote: - quote - > Grandmother sets up Roth for self, naming granddaughter as
If you receive an authoritative reply please let me know. I> beneficiary. At grandmother's death, granddaughter can take > lump-sum withdrawal income tax free. > Alternatively, granddaughter could elect lifetime > withdrawals using granddaughter's life expectancy. That > leaves the bulk of the account to grow tax-deferred. > With that lifetime payout election granddaughter's basis > would be the value of the account as of the grandmother's > passing, meaning part of each payment would be principal, > part taxable interest. Correct? have asked the same question several times and the general consensus is that all the payments received by the granddaughter are principal and NOT taxable. L. T. Portella << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#2
01-27-2004, 10:13 PM
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| Re: Roth IRA question HW "Skip" Weldon wrote: - quote - > Grandmother sets up Roth for self, naming granddaughter as
Why does that matter (principal vs. interest)? You said> beneficiary. At grandmother's death, granddaughter can take > lump-sum withdrawal income tax free. > Alternatively, granddaughter could elect lifetime > withdrawals using granddaughter's life expectancy. That > leaves the bulk of the account to grow tax-deferred. > With that lifetime payout election granddaughter's basis > would be the value of the account as of the grandmother's > passing, meaning part of each payment would be principal, > part taxable interest. Correct? ROTH-IRA. It's also an inherited account, so the tracking of contributions and conversions withdrawn also isn't needed. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#1
01-27-2004, 09:57 AM
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| Re: Roth IRA question "HW \"Skip\" Weldon" <skip5700removethis[at]hotmail.com> wrote: - quote - > Grandmother sets up Roth for self, naming granddaughter as
No, the account contines to grow TAX-FREE, not tax deferred.> beneficiary. At grandmother's death, granddaughter can take > lump-sum withdrawal income tax free. > Alternatively, granddaughter could elect lifetime > withdrawals using granddaughter's life expectancy. That > leaves the bulk of the account to grow tax-deferred. - quote - > With that lifetime payout election granddaughter's basis
Not correct. As long as the grandmother's Roth IRA had been> would be the value of the account as of the grandmother's > passing, meaning part of each payment would be principal, > part taxable interest. Correct? open for at least five years prior to her death, the beneficiary gets completely TAX-FREE distributions over her lifetime. There is no "taxable interest" to consider. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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01-27-2004, 08:21 AM
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| Re: Roth IRA question HW "Skip" Weldon wrote: - quote - > Grandmother sets up Roth for self, naming granddaughter as
As long as the grandmother did not specify that the annuity> beneficiary. At grandmother's death, granddaughter can take > lump-sum withdrawal income tax free. method was to be used by the beneficiary, then a lump sum withdrawn within the required 5 calendar year period would be allowed. The distribution would be tax-free if it would have been tax-free to the grandmother (the Roth IRA normal 5 year period has elapsed). - quote - > Alternatively, granddaughter could elect lifetime
Again for clarity, she can only use the annuity method if> withdrawals using granddaughter's life expectancy. That > leaves the bulk of the account to grow tax-deferred. > With that lifetime payout election granddaughter's basis > would be the value of the account as of the grandmother's > passing, meaning part of each payment would be principal, > part taxable interest. Correct? that was the method specified or no specific method was identified in the plan document. The beneficiary must take the first annuity payment no later than the end of the calendar year after the year of death. As long as the annuity distribution is a qualified distribution it is tax-free. Take a look at Kaye Thomas' site. He does a great job in wxplaining all of this. The inherited Roth IRA stuff is at: http://www.fairmark.com/rothira/inherit.htm -- Alan http://taxtopics.net << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#-1
01-25-2004, 10:12 PM
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| Roth IRA question Grandmother sets up Roth for self, naming granddaughter as beneficiary. At grandmother's death, granddaughter can take lump-sum withdrawal income tax free. Alternatively, granddaughter could elect lifetime withdrawals using granddaughter's life expectancy. That leaves the bulk of the account to grow tax-deferred. With that lifetime payout election granddaughter's basis would be the value of the account as of the grandmother's passing, meaning part of each payment would be principal, part taxable interest. Correct? -HW "Skip" Weldon Columbia, SC << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
| Tags |
| ira, question, roth |
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