Mar 20, 17, 08:48 AM #1
Tax QuestionQuick tax question for our resident tax accountants...
When my grandmother passed away last year her IRA (traditional, not Roth) was split up between my Mom and her siblings. Instead of having the money put into an IRA in her name, my Mom elected to just take it as a distribution. She paid a 10% early withdrawal penalty. She did not receive a 1099 for it.
My question is, since it's an inheritance, does she a) have to report it on her taxes, and b) is it taxable? Also, if she does, where/how do I enter it on TurboTax?Advertisement
Mar 20, 17, 09:01 AM #2
She does not have to pay the 10% early withdrawal penalty. As a non-spouse beneficiary, the funds would have needed to transfer to an inherited IRA or IRA-BDA. Once in the inherited IRA, she could have taken a full distribution. If not a full distribution, she would have had to take the mrd each year if your grandmother was over 70 1/2. The distribution should have come from an inherited IRA. There should have been a 1099R with a distribution code of 4, which is a death distribution. She definitely needs to pay taxes on it.
- Join Date
- Aug 07
Non-Spouse IRA Beneficiary? - Fidelity
That being said, I am not a tax consultant or an accountant. So, maybe someone who is can chime in to verify. I may be wrong about the IRA-BDA but our firm requires it for the distribution.
Last edited by littleluck55; Mar 20, 17 at 09:22 AM.
Mar 29, 17, 11:49 AM #3Another tax question....
My brother and his ex split daycare expenses for their daughter. She already filed her return and claimed her portion of these expenses. I filed his return and claimed his portion. It was rejected and the reason given was that someone else had already filed a return with child care expenses for that SSN. Can only one of them claim the daycare expenses?
@Watusi, you're an accountant aren't you?
Mar 29, 17, 11:54 AM #4
Can Two or More People (such as Divorced Parents) Claim the Same Child as a Dependent?
Only one taxpayer may generally claim any one person as a dependent on a tax return (except, of course, in the case of a married couple filing jointly). If you file your tax return and someone else has already claimed your dependent, then the IRS will apply the tiebreaker rules.
There may be an exception when the splitting of tax benefits for a dependent is detailed in a legal divorce decree. If you have such a decree, you will need to file your tax return on paper and attach the relevant pages of the divorce decree, including the first page and the signature page.
What Do I Do If Someone Claimed My Dependent?
Has your efiled tax return come back rejected because someone else (such as an ex-spouse, grandparent, or another taxpayer) claimed your child as their dependent on their tax return? If you efile your tax return and someone has already claimed your dependent, the IRS will reject your return. This does not necessarily mean that you do not have the right to claim the dependent, but the IRS systems cannot apply the tiebreaker rules on an electronically filed return. If this is the case, you will need to mail your tax return to the IRS. When you prepare your return on efile.com, you can just print a completed copy from your account and mail it to the IRS to file it. The IRS will then be able to apply the tiebreaker rules.
Mar 29, 17, 12:01 PM #5
Mar 29, 17, 12:17 PM #6
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Mar 29, 17, 12:35 PM #8
2. Im pretty sure only one of them can claim expenses, and its the one claiming the child as a dependent in that tax year. (granted Ive been out of the Personal tax side of things since 2011 so if something has changed since then its possible.)
3. Did they reject him claiming the child as a dependent? or was it just the child care expenses that were disallowed?
Mar 29, 17, 12:36 PM #9
Mar 29, 17, 12:44 PM #10
Probably be less of a headache for him to simple remove it, file without any child care expenses and then have her cut him a check for the $ he would've gotten back had she not claimed the expenses, right?
Mar 29, 17, 12:45 PM #11
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