And good evening.

You've got More Than Money.

You've got Gene Dickison, your host, your personal financial advisor.

Happy to serve you for the next half an hour.

I am yours.

And you also get, along with the dapper appearance, 780 years of experience.

Don't ask how, it's one of life's great mysteries, but all of that is at your behest.

All you need do is ask.

If you're a loyal viewer to our More Than Money adventure, then you know exactly how this works.

You send us emails, we give you answers live on air and, goodness, that makes us, without a doubt, the most relevant, the most relevant financial show on television today bar none, because we are absolutely, 100% committed to only talking about topics important to you.

So, how much more relevant can it possibly be than exactly the information that you are requesting?

So, if you are so inclined and would like to have one of your questions answered either on air - or off, you don't have to be on air - You send us an email, gene@askmtm.com.

gene@askmtm.com.

And they can be of any financial topic or your complete financial picture - we get a lot of those that are fascinating, absolutely fascinating.

Retirement, of course, income tax questions, Social Security questions, estate planning questions - the questions, the general topics are not terribly interesting.

Your life, your actual financial challenges inside this journey we call life - fascinating.

Far more interesting than anything I can come up with.

So, my challenge is to be up to the level of your questions.

And they are fantastic.

We can't answer every single question live on air, but I guarantee you that, if you send us your question, we will answer it directly back to you.

Every single question gets answered, even the silly ones, even the hard ones.

We answer every single question back to you.

So, as our show is so structured, our financial correspondent Megan is at the ready for our very first question.

Megan, where do we start?

- Hi, Gene.

Our first question tonight is a little bit on the longer side, but I think it's very personal.

And I love when we get emails like this that our audience trust us with.

It says, I am looking for advice and an opinion on an inheritance issue.

My wife of 13 years passed away a little over four years ago from cancer, at the young age of 38.

She left behind me and our only daughter, who is now a pre-teen.

I'm very close with my in-laws.

Both of her parents are alive, as well as her two brothers.

I have since remarried, which my late wife wanted me to do.

My new wife has been very supportive of our daughter and she and my first wife's family are very accepting of each other.

I got their blessing to date again prior to meeting her.

My relationship with my first wife's family has been very important to me, but I have been disappointed recently by their actions.

While my late wife was alive, her father informed me that he met with their lawyer and had decided to change their will.

Before she was diagnosed with cancer, her father told me that, if anything ever happened to my wife, I would receive one third of their inheritance, divided among their three children.

I was very touched by this and I felt like I was a part of their family.

Recently, my former father in law told me that they have decided to change their will so that my late wife's portion would be divided among their four grandchildren.

I was in a bit of shock when they told me this, but he said something about making sure my daughter would benefit, as I had recently gotten married.

This hurt me a lot more than I let on at the time.

I feel like I'm being pushed out of the family now.

My wife's share of her parent's inheritance is being split among the four grandchildren, my daughter and her three cousins, rather than 100% going to my child.

While I realize nobody is entitled to an inheritance, I feel like it is not what her mother would have wanted.

I also feel like my daughter and I are being punished for my second marriage.

I am being cut out of their will and my daughter is receiving less than her fair share.

I feel very hurt about being told I would get it and then having it being taken back.

After all, this is something that they gave their blessing on and that they agreed had been good for both of us.

I'm wondering, should I talk to my in-laws about this or should I just let it rest?

Thank you for your help.

- Goodness.

And you can hear the pain.

You can absolutely hear the pain.

I would strongly encourage you, do not talk to your in-laws about this.

This has nothing to do with your in-laws.

It's all about you and the pain that you have already suffered and your interpretation of the pain being caused by, it isn't, but your interpretation that the pain is being caused by your in-laws.

It's not.

It's your processing, it's how you're processing this information.

The realities are, as you said in your email yourself, no-one is entitled to an inheritance, and yet you feel entitled.

That, again, has nothing to do with your in-laws.

That's how you feel, that's your processing.

I cannot imagine what you've gone through.

Losing the love of your wife at such a young age, I can't imagine it.

Cannot imagine what your daughter has gone through.

Losing her mom, can't imagine it.

And I'm going to encourage you to talk to the only person that really is relevant in all of this, in terms of dealing with this, and that's yourself.

Either journal, pray, both.

Talk to a counselor.

Express yourself.

Perhaps your current wife is the right person, I would suggest probably not.

But deal with your feelings because these are your feelings.

The inheritance, number one, your father in law, bless him.

I'm sure his intentions were honorable when he originally announced, no matter what, one third of my estate is going to go to you because of your marrying my daughter.

Should never have said that.

Should never have said that.

Equally, should not have been kind of keeping you in the loop about, well, we changed that up and now our granddaughter is going to get less.

Shouldn't have said that either.

And the reality is, we have no idea what the thought process is or continues to be for your in-laws.

Ex-in-laws?

We don't know.

The pain that you felt losing your wife is very real.

The pain they felt losing their daughter is equally as real.

And everyone deals with pain and grief and loss in different ways.

And this may be the current version of how they deal.

And it could change tomorrow.

Estate plans are just that, it's something that we're hoping will be put into play in the future, but they can change in a blink.

Life changes in a blink.

And with any luck at all, with any luck at all, none of this will come to either you or your daughter.

With any luck at all, they will live 30 or 40 more years, they will consume all of their assets, all of their estate, and no-one gets anything.

And by the time that they have passed, your daughter is in her 40s and has a life of her own, well provided for by her father.

So I would encourage you to do a couple of things.

Number one, do not talk to your ex-in-laws.

It's not about them.

Examine and deal with your own feelings.

Four years is not very long.

And the fact that you have remarried and the fact that you have found love again is fantastic.

It's a gift, literally a blessing.

But it doesn't mean that all those feelings are either resolved or forgotten.

So, deal with your own feelings.

I would also encourage you to deal with your daughter.

Don't deal with your daughter in the sense that, hey, your grandparents are not going to do something for you.

Deal with your daughter in the sense of, hey, we're a family.

Look to me, I'm your father.

I'm your father.

I will work hard, I will save money, I will create an estate.

And when I pass, you will be well protected, you will be well taken care of.

So, again, I'm encouraging you to deal with this from your standpoint, not theirs.

And the reality is, for all we know - we simply don't know - one third of the estate that your ex-in-laws currently have, maybe it's only a couple of thousand bucks.

Maybe they're spreading it out that way because they, behind the scenes, without you knowing it, are really in a difficult financial position.

We have no way of knowing.

And it really doesn't matter.

It has nothing to do with us.

And be the father, be the leader of your family.

Care for your daughter, care for your wife.

Make sure you are planning your estate properly, so that your daughter is well protected and well provided for.

And make sure you're taking care of yourself and that you're dealing honestly and directly and gently and compassionately with your own loss and with your own grief.

I hope I helped a little.

I'm certainly not a psychotherapist, not by any stretch of the imagination.

But I hope I helped a little bit, because this is not really a financial question, this is a life question.

And I'm a little further down the path.

So maybe just a little insight as to what happens in your future, maybe it'll help a little.

Wow.

Megan, where do we go from there?

- Well, we switch the mood a little bit.

This one is actually just a comment from a previous show discussion about ties and suits.

This email says, lol, ties.

If I come in your office, can I see someone with no tie, has on jeans and a casual button-down shirt or maybe a sweater?

Suits throw me off all the time, they're too formal and patriarchal, thanks for the laugh, though.

- Well, I don't know how to react to this.

I think I should be hurt.

I'm not.

Folks see me like this all the time.

Old school.

Old school.

Appropriately so, old school.

Suits and ties.

Yeah, that's kind of how I was raised.

I graduated from... ..a modest background, into the military, where we didn't call it a suit, of course, our dress blues, and spent some time there, wearing a suit and tie.

And as I entered the professional world, a suit and tie.

Now, this young lady, bless her, is saying, hey, patriarchal gives me a little bit of agita.

I'm a little bit kind of nervous, but no need to be.

No need to be.

For two reasons.

Number one, we have in our More Than Money world headquarters, a complete team of financial advisors, many of whom would read that email and go, excellent, because they prefer to be without a tie as well.

Button-down shirt, for sure.

Quarter zips are everywhere.

Jeans, not so much, but khakis and public rec.

Oh, yeah.

Lots of relaxation, kind of business casual.

So, there's a lot of that going around.

The second reason I say I think you'll be OK is patriarchal, patriarchal.

That seems to suggest that the entire organization is run by a guy.

Well, I think I'm fairly certain that my wife might take issue with that.

And I think the other women in the office might take issue with that.

As a matter of fact, I think, if anything, matriarchal might be more appropriate.

And if that gives you some comfort about taking the risk of coming into the hallowed halls of the More Than Money world headquarters, so be it.

But I really appreciate your comment and extend it to everyone out there.

We meet folks as they are, and we hope that they will do the same for us.

They will meet us as we are.

If you happen to catch me on the day where I'm in the suit and tie, I hope you don't think ill of me.

Or if you happen to catch me on a day where I'm in Carhartts and work boots and I'm running a chainsaw, I hope you won't think ill of me either, but thanks for the observation.

Patriarchal, matriarchal, we're pretty flexible.

Whatever you need, whatever you need.

Megan, that did change the mood, indeed.

Does that continue?

Let's see.

- It does change again.

But this is back to our regularly scheduled program, I would say.

This question does have a lot of questions within it, though, so get ready for that.

It says, Gene, I love your show.

Why can't you extend it to a full hour?

It says, my mother passed away in January of 2023.

She had an IRA and she took her 2022 RMD.

At the end of 2022, the IRA was valued at 400,000.

She had not taken her 2023 RMD and she would have been 100 years old at the end of 2023.

The beneficiaries are her four children - ages 76, 74, 70 and 67, her custodian distributed the IRA to her four children in new inherited IRA accounts and said that we had to take my mother's 2023 RMD.

We're wondering, do we simply calculate what her RMD would have been using the end of year 2022 value, $400,000, and her end of year 2023 age, 100, and we each take one quarter of this amount as the 2023 RMD?

Does the fact that two of the beneficiaries are not yet of normal RMD age make a difference?

How do we calculate the RMD for each year after 2023?

What table do we use?

What age?

Any difference for those under RMD age?

And finally, as we take the RMD from the inherited IRA, can we have federal and PA state taxes withheld?

I do this with my regular IRA and just want to know if it is any different for an inherited IRA.

Thank you and keep up the great show.

- Well, your words are very kind and very voluminous.

There's a lot of words in there and there's a lot packed into the situation.

And yet, it is far simpler than it appears.

So, let's see if we can summarize this.

Young lady passes at 99, God bless her.

God bless her to a far, far better place.

Still, 400,000 in her IRA, a substantial sum of money.

Impressive, indeed.

Four children splitting it equally.

It appears - appears - the custodian has done this properly and split it into four individual inherited IRAs.

It appears, so far, everything has been done exactly as it should be.

I think the email may have misinterpreted what the custodian has tried to communicate with them when talking about taking Mom's RMD for 2023.

She had not taken an RMD prior.

So it is my assumption - it's out on a limb, but just a tiny bit - that the custodian, prior to setting up the four inherited IRAs, already has taken what mother was required to take, her 2023 RMD, which indeed was calculated on the account balance as of 12/31, 2022, December 31st of 2022, based on her age, 99.

Her end of 2023 age has no relevance.

It is the age at which she took it, 99, and the balance was as of December 31st of the previous year, in this case, 2022.

The IRS is very clear, when someone is a decedent, they still must take that RMD, in this case, probably to your advantage, because that will take a piece of these IRAs and be taxed at Mom's tax bracket rather than the four beneficiaries.

So, that's likely already been done.

When the custodian is saying you must take your mother's RMD, I think the interpretation - I think the correct interpretation - is that you must take an RMD, your RMD, based on her life-expectancy table.

So, her age 99 table for this year.

Thereafter, next year, it would be as if she were 100.

The withdrawal amounts, the required minimum distribution amounts, will be substantial.

10%, 12%, 15% will not surprise me.

And they will rise dramatically every year thereafter.

So, even though as an inherited IRA, you have ten years to fully empty the IRA, you also must, as we have talked about in previous shows, take out, year by year, at least as much as the decedent would have taken out, at least as rapidly.

ALAR is the term that the IRS uses.

So, do you need to take an RMD?

Yes.

Does it matter that two of these folks are not yet RMD age?

No, it does not.

RMDs for inherited IRAs apply to individuals of any age.

76, 66, six - still have to take an RMD.

So, can you process all this rather easily?

Without a doubt.

If the custodian is a professional - sounds like they are - they will inform you of the exact amount that you need to withdraw.

And may you have federal taxes withheld?

The answer is absolutely yes and, in my opinion, you absolutely should.

It will prevent future problems when you show up next April and owe a big chunk of taxes, perhaps unexpectedly.

Will you need Pennsylvania inheritance taxes or income taxes withheld?

The answer is, if you are a resident of the state of Pennsylvania, no.

Some states will tax, they will tax RMD coming out of inherited IRAs.

In that case, as you're watching my show this evening, check with your tax professional in your state to determine whether you should have state income taxes withheld or not.

If you are a resident of the state of Pennsylvania, for one of the few times in your life, in your entire existence as a citizen of the state of Pennsylvania, they're going to cut you a break.

Kind of.

They've been taxing this money right along, so don't feel bad for Harrisburg.

But federal income tax only, have it withheld, you'll be just fine.

And of course, we've covered a lot of ground here.

Your email covered a lot of ground, so did we.

If you have need for clarification, circle back.

We're happy to help.

Whew.

Megs, you're putting me to the test this evening.

How about an easy one?

- This one says, I have noticed a local bank is offering a 13-month CD for 4.25%.

We have close to 60k in various bank accounts right now, and we're thinking about throwing 20k into one of these CDs.

This offer ends January 31st.

What are your thoughts?

- Well, as you have already figured out by the time you're watching this, January 31st is in the past.

Most certainly by the time you see it, it's in the past.

So, goodness, they missed out on 4.25% and maybe they're a little upset.

No, they're not.

I guarantee you, because, as we assure you every single week, every question is answered back to you directly from one of our advisors on our team.

So, when it airs on our show is not terribly relevant to the important information that they need to get in a timely fashion.

So, as we're looking, as of the airing of this show, 5% CDs are everywhere.

Now you may be saying, wait, wait, wait, not at my bank.

And I appreciate that not all banks are created equal.

That's not the right term, but you know what I mean.

The reality is that there are lots of banks who are offering very low interest rates, but interest rates have risen rather dramatically, rather dramatically.

And as a result, well, I placed an investment for a client earlier today for 5%.

It's a seven-month CD.

So, very short term, very high rate of return.

Is that a sound, safe investment?

It absolutely is.

Does it fit you perfectly?

Sounds like it does.

But, of course, if you're not 100% sure, circle back.

We'll be able to help.

Megan, what's next?

- It says, I have a house in the New Jersey shore that I want to sell.

My problem is the capital gains tax.

I do not rent the house out, I have it for personal use.

I paid my parents $1 for the house.

Can I file a 1031 form when I sell it?

I want to buy another house.

How can I avoid paying a lot of taxes on this sale?

Thank you in advance for your help.

- Yeah.

1031, for most of you, that means nothing.

The word exchange might help.

It might help.

In the world of real estate investment - and there are other investment scenarios where this applies as well, but particularly in the world of real estate investment - it is fairly common that a person has had a property for a very long period of time, wishes a different property, but also doesn't wish to pay the piper, so to speak, pay the capital gains tax, because it can be - goodness, this gentleman paid a dollar, if it's at the shore and it's worth $500,000, there's a very real possibility it's a $100,000 loss to taxes.

An exchange says if we take that very same capital and, within a timely fashion - lots of rules, tons of rules - make sure you're using a trusted, experienced exchange attorney, someone who is very familiar with the law, very familiar with the rules.

It is not just a real estate attorney, it must be someone who's very experienced on the exchange side of life.

You are then legally able to - not avoid - defer.

Put off paying the tax to a later date.

So, if done properly, if done properly, we sell property A, we exchange those proceeds into property B.

We pay no capital gains tax at the moment.

At some point in the future, property B, whatever we paid for it - $500,000, $600,000, $700,000 - we will decide to sell at some point in the future.

Let's say that there is a $1,000,000 sale in our future and we go, well, we paid 600,000 or 700,000, so the gain is...?

Whoa, whoa, no.

You have deferred taxes, you have not avoided taxes.

Your gain, because you paid $1 for this original property A, your capital gain will be the difference between the sale price and $1.

So, the capital gains will be pushed off.

In most cases, a very valuable thing to do, a very reasonable thing to do, but they're not avoided.

And be very clear on that point before you decide that you want to move forward.

Now, avoiding capital gains, is there a way to do that?

The answer is yes.

I'm not sure you're going to like the answer.

It's when you die.

Because if you own a piece of property and it has a huge capital gain because you paid a dollar, when you pass away, your heirs, your beneficiaries, will receive a stepped-up basis to the value of the property the day you passed away.

That's the way you avoid big taxes.

Tough way to avoid taxes.

Speaking of avoiding, there's lots of things that you might want to avoid.

And maybe if you had good information, good intel, good guidance, you might be able to avoid some of those pitfalls.

That's exactly why we invented More Than Money.

That's exactly why PBS allows us to bring all this great information to you.

So, if you would like guidance, all you need do is ask.

gene@askmtm.com .

Send us your emails, explain your questions, we'll be happy to help.

It has been a pleasure to serve you for this week.

We hope you've learned enough, maybe been entertained enough that you'll return next week on More Than Money.

Goodnight.