Legal Question in Investment Law in Illinois

I am 65 and have just retired. I would like to take my money out of my 401k and gift it to a family member. Will I have to declare it as income and pay taxes on it? The amount is under $15,000.


Asked on 3/05/14, 12:53 pm

1 Answer from Attorneys
Stephen Messutta

Most likely yes, and there may be gift taxes too. The whole point of a properly qualified 401(k) plan was to defer income taxes until retirement when the rate presumably is lower, so that all you can do until you do withdraw, is invest and roll over... On the other hand, if is was NOT properly qualified and you did pay income taxes on the amounts contributed, then you do not have to pay them again. Check with your plan administrator. On the flip side, you know normally you HAVE to start taking withdrawals when you hit 70 1/2, right?

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Answered on 3/05/14, 3:01 pm


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