I am a single, 61-year-old with a full-time job (roughly $60k per year), never owned a home, pay $1,777 for monthly rent, owe $5,000 on my car, with $400 on my credit card. No other personal expenses.
My younger sister passed away in July 2024, aged 58 years old. Her will named myself and my son as beneficiaries of her estate (consisting of her townhouse, no cash left in her bank account), which must go through the probate process. She named two executors (two other sisters) who both declined to act, so I filed a petition to probate her estate. My son and I are maintaining the mortgage ($190,000 left to pay off), HOA, and property tax payments, along with some basic utilities to keep power and internet available at her house. She has a few very moderate credit card debts and a few utilities still owed on, but nothing too substantial, to our knowledge anyway, as far as creditor claims go. I expect to be appointed as personal representative tomorrow morning. Our plan is to sell the house, as we are expecting the court to order an as-is probate sale to satisfy creditor claims.
Recently, I learned that my late sister also left behind a traditional IRA and named me as sole beneficiary, the amount being about $650,000.
My question is this: is the best course of action to withdraw a portion of the inherited IRA to pay off the mortgage, the taxes on the withdrawn amount and to cover repairs to upgrade her house in order to increase the sale profit and also to cover capital gains?
I have always lived paycheck to paycheck and typically receive just over $2,000 in federal and state tax returns each year. I feel like a deer in headlights at the thought of higher tax brackets and home ownership so please bear with my extreme lack of knowledge in these matters. I am not even sure who the best person is to contact for guidance: a tax expert or estate planner or financial advisor? Any suggestions would be greatly appreciated!
Laura
My younger sister passed away in July 2024, aged 58 years old. Her will named myself and my son as beneficiaries of her estate (consisting of her townhouse, no cash left in her bank account), which must go through the probate process. She named two executors (two other sisters) who both declined to act, so I filed a petition to probate her estate. My son and I are maintaining the mortgage ($190,000 left to pay off), HOA, and property tax payments, along with some basic utilities to keep power and internet available at her house. She has a few very moderate credit card debts and a few utilities still owed on, but nothing too substantial, to our knowledge anyway, as far as creditor claims go. I expect to be appointed as personal representative tomorrow morning. Our plan is to sell the house, as we are expecting the court to order an as-is probate sale to satisfy creditor claims.
Recently, I learned that my late sister also left behind a traditional IRA and named me as sole beneficiary, the amount being about $650,000.
My question is this: is the best course of action to withdraw a portion of the inherited IRA to pay off the mortgage, the taxes on the withdrawn amount and to cover repairs to upgrade her house in order to increase the sale profit and also to cover capital gains?
I have always lived paycheck to paycheck and typically receive just over $2,000 in federal and state tax returns each year. I feel like a deer in headlights at the thought of higher tax brackets and home ownership so please bear with my extreme lack of knowledge in these matters. I am not even sure who the best person is to contact for guidance: a tax expert or estate planner or financial advisor? Any suggestions would be greatly appreciated!
Laura
Statistics: Posted by driftmom — Wed Dec 04, 2024 2:04 am — Replies 2 — Views 169