Income Tax on IRAs and 401Ks? (attorney, live in, bill)

[doc1]

Does TN impose income taxes on distributions from personal retirement plans like IRAs and 401Ks?

Thanks,

Doc1

[mrradio]

Below is a quotation from an explanation of the tax code.

As the Tennessee income tax does not apply to salaries and wages, items of income such as Social Security and pension income are not subject to state tax. Tenn. Code Ann. Section 67-2-104(m) provides that income from stocks and bonds of pension trusts and profit-sharing trusts which are exempt from federal income taxation shall be exempt from the state income tax. This includes such accounts as IRA and 401(k) accounts. Distributions from IRAs and 401(k) plans are also exempt.

[doc1]

Originally Posted by mrradio

Below is a quotation from an explanation of the tax code.

As the Tennessee income tax does not apply to salaries and wages, items of income such as Social Security and pension income are not subject to state tax. Tenn. Code Ann. Section 67-2-104(m) provides that income from stocks and bonds of pension trusts and profit-sharing trusts which are exempt from federal income taxation shall be exempt from the state income tax. This includes such accounts as IRA and 401(k) accounts. Distributions from IRAs and 401(k) plans are also exempt.

Thanks for the info, mrradio

[walt 135]

I live in Tn and am inheriting an ira. is it taxable

[Barking Spider]

You should ask your cpa, accountant, attorney or financial advisor, and not rely on advice given from people on the internet that may or may not know the answer.

[Kim918]

Originally Posted by walt 135

I live in Tn and am inheriting an ira. is it taxable

You mention the word "inherit" as in someone leaving it to you in a will? Could that be the difference and why it is taxable?

[JMT]

Originally Posted by walt 135

I live in Tn and am inheriting an ira. is it taxable

Moderator cut: orphaned

Barking Spider is right, you really need to ask an accountant. This forum is not some sort of official Tennessee bureau.

Or you can find the info on the Tennessee Department of Revenue web site:

Taxes (http://www.tennessee.gov/revenue/taxes/index.htm - broken link)

or specifically the page that discusses the income tax on dividents, bonds, or stocks:

http://state.tn.us/revenue/tntaxes/indinc.htm (broken link)

Or you can call the Tennessee Department of Revenue, toll free:
(800) 342-1003

[marmac]

just a reminder-------------you would still owe FEDERAL taxes( walt135)

[Exrvi]

Walt 135,

I went thru this a couple of years ago. I live in Tennessee, my Father lived in Virginia. Since he died in Virginia there was no Tennessee estate tax (although Virginia took a slice) and I owed no Tennessee inheritence taxes (since the estate was in Virginia). If, however, my Father had lived in Tennessee, there would have been both a State estate tax and I would have paid an inheritence tax as well. At the time, I was redoing my own estate plans since I was new to Tennessee, so I verified this with the attorney I was working with - a women who actually co-wrote a book titled "Estate Planning in Tennessee." Some of the estate was in an IRA, some was not - and it made no difference in how it was treated - money is money!

One warning - inheriting an IRA has to be handled very carefully. For example, you have to make sure it is retitled correctly. You can't role an inherited IRA over into an IRA you may already have. If the original owner of the IRA was taking Required Minimum Distributions, you need to continue taking them, but at an amount based on your age. Etc, Etc, Etc. BE CAREFUL or you could face a tax bill and/or penalties. Get some good advice, particularly if this is a large IRA.

But JMT is right - check this out yourself. I can only tell you what happened to me. Your circumstances may be different and I am certainly not an expert on this stuff - just been thru it not long ago.

Jeff