My wife recvd a distrbtion from a roth ira. Her parnts made the orgnl contribution. can we claim the contrb?

Question

the difference in the tax is large if she is able to claim the original contribution

Answer 1

Who was the owner of the Roth IRA?

If it is your wife's Roth IRA and her parents gave her the money for the contribution, it is the same as if she made the contribution. If she takes money out of the Roth IRA, the contributions are considered to come out first and are not taxed. The remaining distribution is subject to tax and penalty if she is under 59.5 years old or the Roth IRA is less than five years old.

If it was her parent's Roth IRA and she received the distribution from an inherited Roth IRA, then the original contribution was already taxed and she will not pay tax again on that amount. The remaining distribution is subject to income tax but no penalty since it is a distribution after the death of the owner.

Answer 2

Distributions and contributions to or from roth iras are not taxable because they are not deducted or as you put it "claimed" to begin with. There is no tax benefit upfront for contributing to a roth the benefit is that it's interest is not taxed when you take a distribution. The other benefit is you can pull out the money you contributed at any time you just can't touch the earning w/out penalty until your 70 1/2.

If you are mistaken and it's a traditional ira that it's a tax break up front for the person who contributed so no your wife could not deduct it. And if she is not old enough to recieve traditional roth distributions there will probably be a penalty.

Go talk to a tax person so you don't end up having to pay penalties and fines to the IRS because you did something wrong.