My mother inherited my dad’s IRA. Can she to give it away to her grandchild?

Post date: Nov 19, 2019 6:50:27 PM

A client asked me this recently and the answer is complicated. She probably inherited it as his named beneficiary because could not have owned the IRA jointly because joint ownership of an IRA is not permitted.

Assuming she rolled his IRA into her own, something only a spouse can do, she will need to plan for taking a required minimum distribution (RMD). You said she would turn 70 this year. If her birthday is late in the year, she turns 70½ in 2020 and no RMD is required for 2019. The receipt of the letter suggests her birthday is in the first part of the year, making her 70½ in 2019. She cannot give IRA money directly to anyone other than a qualified charity. A donation to a qualified charity made directly from her IRA can count toward her RMD and will not be counted as taxable income. To give IRA money to any party other than a qualified charity, she must first pull the money from the IRA and report the income that results.

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