My name is Daniel and I am from Israel

I’m not an American citizen and I living in Israel.

My Grandmother was an American Citizen and she died 3 month ago.

Her heritage for me was $5000

I’ve been received a beneficiary letter from sun trust bank and I don’t have any Idea how to fill it up.

I heard that if the will is less than $5000 you don’t have to pay tax.

I heard many good things about your organization and I thought to contact you for help

how should I fill up the enclose Form Below ?

Non-Spouse, Non-Person, or No Beneficiary Distributio Election Individual Retirement Account

Bank Cost Center Number Cost Center Name

Beneficiary Information________________________
Beneficiary Name________________________ Customer Number______________________ Taxpayer/Trust/Estate ID No._______________________ Date of Birth__________________

Decedent Information______________________
Decedent Name_______________ Customer Number_________________ Taxpayer ID Numbe_____________r Date of Birth____________ Date of Death________________

Beneficiary must make a distribution election by December 31 of the year following the Participant’s death. Failure to make an election will result in SunTrust beginning automatic annual distributions. Distribution options available for the Roth and Roth Conversion IRA Plans are indicated below. If a non-spouse beneficiary elects one of the periodic distribution options, the funds are transferred to a new account titled in the name of the beneficiary as beneficiary of the deceased Participant. The beneficiary does not complete an Adoption Agreement or designate a beneficiary. IRA or SEP distribution options are based on whether the Participant died before or after required beginning date of April 1 of the year following the year he attained age 70 1/2. Roth distribution options do not have a required beginning date.

I. Non-Spouse Options (select one)
IRA or SEP Participant died before required beginning date or Roth Participant died at any age:
@________ Five year payout—Any funds remaining in the account by December 1 of the fifth year following the participant’s death will be paid out
@_________ Receive periodic distributions beginning by December 31 of the year following the year of the Participant’s death. Method of distribution calculation will be based on non-spouse beneficiary’s non-recalculated single life expectancy.
IRA or SEP Participant died after required beginning date. (Does not apply to Roth):
@_________After the Required Minimum Distribution (RMD) for year of death is paid, receive periodic distributions beginning by December 31 of the year following the year of the Participant’s death. Method of distribution calculations will be based on the longer of non-spouse beneficiary’s non-recalculated single life expectancy or deceased IRA Participant’s remaining non-recalculated single life expectancy (reduced by one).
Non-person or No Beneficiary Options (select one)
IRA or SEP Participant died before required beginning date or Roth Participant died at any age:
@___________ Five year payout—Any funds remaining in the account by December 1 of the fifth year following the participant’s death will be paid out
IRA or SEP Participant died after required beginning date. (Does not apply to Roth):
0 After the RMD for the year of death is paid, receive periodic distributions beginning December 31 of the year following the year of the Participant’s death. Method of distribution calculation will be based on deceased Participant’s non-recalculated single life expectancy (reduced by one).

II.Based on the election selected above, the amount of the distribution will be made as follows: (select one)
@___X_____ Lump Sum (Caution: Funds cannot be treated as a rollover.)
@_________ Minimum Distribution Amount
@___________ Fixed Amount of $ or Minimum Distribution Amount, whichever is greater.

ÂIII. Distribution Beginning Date and Frequency
Beginning on
@_______ Monthly @_________ Quarterly @_________ Semi-Annually @_________Annually

IV. Distribution Method
@_____________ Credit my SunTrust Deposit Account Number or @__X____ Mail Check

V. Election of Withholding of Federal or State Income Tax
@________Initial Election 0@_____________Change Existing Withholding Election

Caution: If you elect not to have Federal or State Income Tax withheld, you are liable for payment of Income Tax on the taxable portion of your distribution. You may be subject to tax penalties under the estimated tax payment rules if your payments of estimated tax and withholding, if any, are not adequate.
Note: If you are a United States citizen or resident alien receiving periodic or non-periodic payments that are delivered outside the United States or its possessions, withholding is required. You cannot choose not to have income tax withheld.

VI. Federal Withholding Options (select one)
@________ Do not withhold Federal Income Tax from my IRA distribution.
@__________ Withhold Federal Income Tax from my IRA distribution of % (not less than 10%) of the distributed amount.

VII. State Withholding Options (select one)
@_____________ Do not withhold State Income Tax from my IRA distribution
@_________________ Withhold State Income Tax from my IRA distribution of % of the distributed amount, if applicable.
Primary State of Residence

I agree that, to the best of my knowledge, the information provided on this election is true and correct. Due to the important tax consequences of this transaction, I agree to seek the advice of a legal or tax professional, if needed. I will not hold the Custodian liable for any adverse consequences that may result from this transaction.
Beneficiary
Signature Authorized Signature
of Custodian
Date
Print Name and Title

Phone Number

Date

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Daniel,
I do not know what the tax withholding will be or if there is a US-Israel tax agreement, but since the amount you are inheriting here is modest and the regulatory work will be considerable, you should ask for a full distribution of the amount less whatever tax rate in required. You may have to file for an ITIN (Tax ID #).

This inheritance is NOT covered under her will, only by the IRA agreement under which you were named as a beneficiary. There is no minimum amount under which no tax applies unless some special agreement applies with respect to Israel. This is a large bank and they will know how much tax must be paid. I would expect it to be as high as 30% of the 5,000.

With respect to the form:
1) The bank will know the decedent information, so just enter what you know
2) Provide you own info and show that you are a citizen of Israel
3) The “lump sum” distribution box is already checked and I would leave it that way, also the “mail check” box
4) Just forget the federal and state withholding options. The bank will see that you are a foreign national and withhold the amount required.

Note that under a US IRA account, the contributions were typically not taxed when made to the account, but are taxable when withdrawn from the account.

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