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#7
03-04-2004, 12:55 AM
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 Re: Child Inherits IRA - quote - > > > > Is the income from an IRA inherited by a child under 14
Mr. Kalman conceded<g> .> > > > suject to the kiddie tax? > > > Unfortunately, yes. > > The question was whether the income received was subject to > > the Kiddie Tax. The Kiddie Tax is the name given to a > > child's investment income being taxed at the parent's tax > > rate. The IRA distribution is taxable, but it is taxed at > > the child's rate, not the parent's rate. > Thanks for both of your replies. > This discussion is *EXACTLY* the source of my confusion. My > reading of Pub 929 indicates on one hand that only income > from the child's labor is considered "earned income" and is > not subject to the kiddie tax. On the other hand, the IRA > income isn't exactly "investment income". I'm hoping we > continue the discussion until we get a resolution. - quote - > The confusion is caused by the use of the term "investment
I'm glad we were able to get this worked out.> income", which under common usage would not include IRA > income. However, the law itself does NOT use the term > "investment income". Rather it uses the term "unearned > income", which (duh!) is everything except earned income, > and IRA income is NOT earned income. Barry Picker, CPA/PFS, CFP << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#6
03-03-2004, 01:12 AM
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| Re: Child Inherits IRA - quote - > > > Is the income from an IRA inherited by a child under 14
Thanks for both of your replies.> > > suject to the kiddie tax? > > Unfortunately, yes. > The question was whether the income received was subject to > the Kiddie Tax. The Kiddie Tax is the name given to a > child's investment income being taxed at the parent's tax > rate. The IRA distribution is taxable, but it is taxed at > the child's rate, not the parent's rate. This discussion is *EXACTLY* the source of my confusion. My reading of Pub 929 indicates on one hand that only income from the child's labor is considered "earned income" and is not subject to the kiddie tax. On the other hand, the IRA income isn't exactly "investment income". I'm hoping we continue the discussion until we get a resolution. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#5
03-03-2004, 01:12 AM
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| Re: Child Inherits IRA - quote - > > > Is the income from an IRA inherited by a child under 14
Look at the rules. The law for Kiddie Tax purposes defines> > > suject to the kiddie tax? > > Unfortunately, yes. > The question was whether the income received was subject to > the Kiddie Tax. The Kiddie Tax is the name given to a > child's investment income being taxed at the parent's tax > rate. The IRA distribution is taxable, but it is taxed at > the child's rate, not the parent's rate. investment income as everything except earned income. Therefore IRA distributions count as investment income, and are thus subject to Kiddie Tax. Barry Picker, CPA/PFS, CFP << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#4
03-03-2004, 12:53 AM
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| Re: Child Inherits IRA Barry Picker wrote: - quote - > "A.G. Kalman" <glendale202-mtm[at]yahoo.com> wrote:
I stand corrected. I thought retirement distributions were> > John Smith wrote: > > > Is the income from an IRA inherited by a child under 14 > > > suject to the kiddie tax? > > No, it is not investment income. > Incorrect. Look at the instructions for the form 8615. > Investment income is everything except earned income. IRA > income is NOT earned income. excluded. -- Alan http://taxtopics.net << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#3
03-02-2004, 05:46 AM
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| Re: Child Inherits IRA "A.G. Kalman" <glendale202-mtm[at]yahoo.com> wrote: - quote - > John Smith wrote:
Incorrect. Look at the instructions for the form 8615.> > Is the income from an IRA inherited by a child under 14 > > suject to the kiddie tax? > No, it is not investment income. Investment income is everything except earned income. IRA income is NOT earned income. Barry Picker, CPA/PFS, CFP << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#2
03-02-2004, 04:48 AM
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| Re: Child Inherits IRA Barry Picker wrote: - quote - > "John Smith" <rshap2l[at]yahoo.com> wrote:
The question was whether the income received was subject to> > Is the income from an IRA inherited by a child under 14 > > suject to the kiddie tax? > Unfortunately, yes. the Kiddie Tax. The Kiddie Tax is the name given to a child's investment income being taxed at the parent's tax rate. The IRA distribution is taxable, but it is taxed at the child's rate, not the parent's rate. -- 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
03-01-2004, 07:44 PM
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| Re: Child Inherits IRA "John Smith" <rshap2l[at]yahoo.com> wrote: - quote - > Is the income from an IRA inherited by a child under 14
Unfortunately, yes.> suject to the kiddie tax? << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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03-01-2004, 07:05 PM
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| Re: Child Inherits IRA John Smith wrote: - quote - > Is the income from an IRA inherited by a child under 14
No, it is not investment income.> suject to the kiddie tax? -- 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
02-29-2004, 07:57 PM
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| Child Inherits IRA Is the income from an IRA inherited by a child under 14 suject to the kiddie tax? << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
| Tags |
| child, inherits, ira |
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