Legal Blog
The Weekly Scenario: How to Avoid Paying Income Taxes on an IRA
Question: Is there any way that I can eventually avoid paying income taxes on my IRA?
Answer: When funds are distributed out of an IRA (other than a Roth), income taxes are generally due. If you leave your IRA to your spouse or children, taxes can often be deferred, but of course taxes will be eventually paid.
However, if you leave the IRA to a 501(c)(3) charity, the IRA proceeds will be excluded for both estate and income tax purposes. This way, the charity will receive 100% of the gift (qualified charities do not pay income taxes) without reduction for income taxes.
As always, if you have any questions or would like to learn more, please contact me at sshane@offitkurman.com or 301-575-0313.
ABOUT STEVE SHANE
You can connect with Offit Kurman via our Blog, Facebook, Twitter, Google+, YouTube, and LinkedIn pages. You can also sign up to receive Law Matters, Offit Kurman’s monthly newsletter covering a diverse selection of legal and corporate thought leadership content.
MARYLAND | PENNSYLVANIA | VIRGINIA| NEW JERSEY | NEW YORK | DELAWARE | WASHINGTON, DC