Hello. My mother-in-law is 66 and retired last year. She lives in California and collects social security and also collects income by renting out her house. She's going to withdraw $325K from her retirement 401K and "gifting" it me and my wife for a down payment on a new house we purchased.
We understand the $325K withdrawal will be taxed as if it were income. When she initiates the withdrawal, can she pay the state and federal taxes at the time of withdrawal, similar to how we're taxed when we get paid from our employer? If not, how does this work?
Any advice on how to go about this? Thank you, Billy
We understand the $325K withdrawal will be taxed as if it were income. When she initiates the withdrawal, can she pay the state and federal taxes at the time of withdrawal, similar to how we're taxed when we get paid from our employer? If not, how does this work?
Any advice on how to go about this? Thank you, Billy