My FIL passed away last month (age 56) and my wife and her sister are the beneficiaries for his IRA (95% sure is traditional, but I will confirm). 50-50 split between the two of them. I want to make sure I've got things accurate based on what I've read.
They have two choices - minimum yearly withdrawals or the 5 year withdrawal where they remove all funds within 5 years. If they do the 5 year, they will pay taxes on all earnings plus a 10% tax on the total amount they withdrawal? For example, if it's worth $100,000, with $50,000 of that being Cap gain, they will pay tax based on their tax bracket on the $50,000 and 10% tax on the entire $100,000? And the $50,000 cap gain is treated as ordinary income to the beneficiary?
The minimum yearly withdrawal is based on age and a govt divider, correct? My wife is 29, so hers is 54.3, so she would have to take out $100,000/54.3 each year? If she took out more before she turned 59.5, she would pay the 10% penalty?
Appreciate any clarification or confirmation.
They have two choices - minimum yearly withdrawals or the 5 year withdrawal where they remove all funds within 5 years. If they do the 5 year, they will pay taxes on all earnings plus a 10% tax on the total amount they withdrawal? For example, if it's worth $100,000, with $50,000 of that being Cap gain, they will pay tax based on their tax bracket on the $50,000 and 10% tax on the entire $100,000? And the $50,000 cap gain is treated as ordinary income to the beneficiary?
The minimum yearly withdrawal is based on age and a govt divider, correct? My wife is 29, so hers is 54.3, so she would have to take out $100,000/54.3 each year? If she took out more before she turned 59.5, she would pay the 10% penalty?
Appreciate any clarification or confirmation.