IRA distributions as income ?

[yomann]

We appear to be in a catch-22 situation in regards to IRA distributions.
My wife is employed but only makes $35k/yr, and I am unemployed.
We have been filling in the gaps by IRA withdrawals from each of our retirement accounts.
Our attorney says this puts us overlimit for filing CH7 !
My question is that since IRA withdrawals are not "earned income", can they be shown in a different place of the BK7 forms, so we do not go over the limit ?

[justbroke]

There's a divergence of opinion on this matter. I think the majority view is that withdrawing from an IRA/Retirement account is not income, because it is just an existing asset, liquidated. It's as though it was in a savings account, and taking money out of your savings account is not income. If your attorney believes it is income, ask him why is it different from withdrawing from a savings account.

However, in Florida, the Office of the United States Trustee (OUST) seems to believe that withdrawals are income. However, the OUST is willing to look at the facts specific to the withdrawal(s). If the withdrawal(s) was due to living expenses, that's one fact that will probably keep the UST off your back. In any case, our OUST (Region 21) says indicates that they treat it as income, regardless.

I have always believed that withdrawals from retirement accounts are not dissimilar to withdrawing from a savings account. Hopefully, someday, all the Districts and courts will agree.

For now, it depends on which District you live in.

[lalap123]

Same thing in Georgia. I cashed in part of my retirement and was told I'd have to wait for it to fall off my 6 months if I wanted to be under the median. I feel your pain!

[yomann]