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Question: I think I need to take money out of my BuyandHold IRA. Is that transaction required before the end of the year?

A BuyandHolder

Answer:

Dear BuyandHolder,

You may be able to skip your IRA withdrawal this year, but it depends upon your age.

After you read the rules outlined below, if you have any questions click here to contact BUYandHOLD.

1) Owners of IRAs who are 70? or older are usually required to withdraw a stated minimum amount every year - or be hit with penalties. However, in 2008, Congress passed legislation that waived that minimum withdrawal requirement - but just for the year 2009.

This means that seniors can leave all their money in their IRA and participate in the recent market rebound. Not making a withdrawal also means less taxable income when filing your taxes for the year 2009.

2) The way your question is phrased, it seems that you have not made a withdrawal thus far this year. But if you didn't know about the exception for 2009 and you have withdrawn money (and if you're over 70?), the IRS allows you to roll back the money into your IRA. The last day you can do so is November 30th or 60 days after you received your withdrawal - whichever is later.

You can roll back (or redeposit) just one withdrawal?so seniors who automatically have IRA checks sent to them every month can return only one month's check.

3) The redeposit rule does not apply to people who inherited an IRA from someone other than their spouse. However, non-spouse beneficiaries can skip a withdrawal this year.

4) It might be of interest to know that you can make a direct contribution from your IRA to a charity. Again, you must be at least 70? and the money must go directly from BUYandHOLD to the charity. This tax break expires on December 31st so do so well before the end of the year.

You cannot deduct the charitable contribution, but on the other hand, the amount you withdraw will not be included in your taxable income.

Further details: www.irs.gov (in the search box type "IRA withdrawals, 2009.) Good luck!

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