Federal Receivership | Ed Slott and Company, LLC

Federal Receivership

An acquaintance says that her IRA is subject to a federal receivership. If she is required to turn over funds from the IRA, will that be treated as a taxable distribution?

Yes, the distribution will be taxable, but if the IRS levies the IRA the 10% penalty will not apply. The person therefore should not voluntarily take an IRA distribution if under 59.5.

 

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