Tax Season 2018 Q&A

Q: I inherited an IRA from my cousin. He passed away in November 2017 at age 72 and he hadn’t taken his 2017 RMD yet, so I took it in December. Is this RMD reported on his estate tax return or my 2017 tax return?

A: Your tax return. Year of death RMDs are reported on the recipient’s tax return.

Q: Are my Social Security benefits taxable?

A: Maybe. It depends on several factors including your income, filing status and income you received from other sources.

Q: I am 55, still working and have three IRAs. Can I contribute $6,500 to each IRA?

A: No. The IRA contribution limit is an aggregate limit.

Q: May I deduct IRA losses on my 2017 tax return?

A: Not unless you withdraw the entire balance from all of your IRAs of the same type. Losses and gains are not taken into account on your tax return while your IRA is still open.

Q: If I have a Roth IRA, aren’t all of my distributions automatically tax and penalty free?

A: No, only qualified Roth distributions are tax and penalty free. There are circumstances where there may be income tax due and/or an early distribution penalty could apply.



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