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Old 08-03-2018, 04:51 AM
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Kiddie tax on inherited IRA?

If a dependent child (student under 24) receives (inherits) a beneficiary IRA and withdraws the RMD (required minimum distribution), is this distribution considered unearned income with regard to the "kiddie tax" requirement? By this I mean, does this amount count towards the $2100 threshold, any amount above which is taxed at the parents' rate?



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Old 08-03-2018, 10:33 AM
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If a dependent child (student under 24) receives (inherits) a beneficiary IRA and withdraws the RMD (required minimum distribution), is this distribution considered unearned income with regard to the "kiddie tax" requirement? ==========>> it is investment income. Investment income is everything except earned income. IRA
income is NOT earned income. Therefore IRA distributions count as investment income, and
are thus subject to Kiddie Tax.



By this I mean, does this amount count towards the $2100 threshold, any amount above which is taxed at the parents' rate?=======>As mentioned above; The Kiddie Tax is applied to the amount of your child's unearned income exceeding $2,100. The Kiddie Tax rate is your marginal tax rate .



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Old 08-03-2018, 10:21 PM
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Thank you, Wnhough. So, inherited IRA income counts the same as capital gains, interest, etc., when it comes to the Kiddie Tax, right?



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Old 08-05-2018, 08:00 AM
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Quote:
Originally Posted by 2davidc8 View Post
Thank you, Wnhough. So, inherited IRA income counts the same as capital gains, interest, etc., when it comes to the Kiddie Tax, right?
correct as unearned income



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Old 08-09-2018, 03:35 AM
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Thank you, Wnhough!



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Old 08-09-2018, 03:44 AM
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Thank you, Wnhough!



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