Inherited IRA – under 59 1/2
Can a 25 year old who inherited an IRA from relative take withdrawals and not be penalized with 10% penalty?
I realize taxes should be paid but is there a penalty for early withdrawal? An accountant in office insist that penalties still applies.
Permalink Submitted by Alan - IRA critic on Tue, 2024-08-06 14:04
The account is incorrect. Distributions from inherited accounts are never subject to the 10% penalty. They would be coded “4” in Box 7 indicating that the IRA is inherited. Once the code 4 is entered into a tax program, no penalty should be generated.