Withdrawal from IRA as a gift

Forum|Forum|1 year ago
October 30, 2024
1 reply
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We filed our taxes last year with having Turbo Tax do everything. We plan on using the experts at Turbo Tax this year also. We withdrew 25K from our IRA as a gift to our son. I know our withdrawal is taxable. Is there anything that can be done to lesson the pain from adding additional incoume

xmasbaby0

Employee

What you did with the retirement fund distribution is irrelevant. Gifting it to your son does not mitigate the tax burden. Sorry. However, if you gave more than the yearly amount to your son, you may need to file a form 709 gift form with the IRS.

To enter your retirement income, Go to Federal> Wages and Income>Retirement Plans and Social Security>IRA 401 k) Pension Plan Withdrawals to enter your 1099R.

Gifts given to family members, friends or other individuals are not deductible. Gifts received are not taxable to the person who received the gift, and are not entered on a tax return.

If your gift exceeds the yearly limit ($17,000 per individual) imposed by the gift tax rules, then you will need to complete a Form 709 gift tax form and send it to the IRS, although it is very unlikely that you will owe any tax. In 2024 that yearly limit will increase to $18,000.

TurboTax does not support Form 709. It is not an income tax form and would not be included as part of an income tax return.

Here is a link to the form:

https://www.irs.gov/pub/irs-pdf/f709.pdf

https://turbotax.intuit.com/tax-tips/estates/the-gift-tax-made-simple/L5tGWVC8N

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**