American soldiers in a snowy ditch in Belgium during the Battle of the Bulge in 1945. Before the attack, some German troops who were able to speak English disguised themselves as Allied soldiers. They made a point of changing road signs and generally spreading misinformation. (Germans captured engaging in the subterfuge were executed by firing squad.)
John Florea—Time & Life Pictures/Getty Images
By timestaff
November 19, 2013

Q: My 80-year-old father has a substantial amount in his IRA. Can he give it to his children right now? — Roxanne, Brownsville, Texas

A: Your dad can’t transfer the account directly, says Ed Slott, publisher of Ed Slott’s IRA Advisor newsletter; he could, however, take out all he wants, pay any taxes due, and then hand out the money.

His withdrawals from a traditional IRA, other than nondeductible contributions, would be taxed as ordinary income; Roth IRA withdrawals are tax-free if the account has been open for five years.

Unless the kids need cash urgently, it’s better to name them as beneficiaries.

Upon your dad’s death, a child can keep the assets growing tax-deferred in an IRA, taking mandatory minimum distributions based on life expectancy. Money from a traditional IRA is taxable; inherited Roth money generally isn’t.

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