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How to keep your parents’ assets from the taxman

This article is reprinted by permission from NextAvenue.org.

When I was named executor after my father’s death in 2004, one of the first logical steps seemed to be closing his individual retirement account (IRA). Fortunately, my sister Michele told me about a way to continue to allow that money to grow tax-free for decades with something called an IRA-BDA (Beneficiary Distribution Account).

This underused product gives you the ability to withdraw these IRA funds over an extended period, maximizing your tax-deferred growth of this money. The result of that one piece of advice: this $16,000 account now has a value of $44,000, and I continue to get a distribution of approximately $1,000 a year.

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