Inherited Roth IRA
Roth IRA consists of all conversions (4 conversions done in 2003, 2004, 2005, and 2006)
Owner died in 2006. Son is beneficiary and must start taking RMDs from the account. Because the first conversion isn’t 5 years old, does the son have to pay a 10% penalty when he takes out the RMD, or does the fact that it is required eliminate the 10% penalty?
Permalink Submitted by Denise Appleby on Wed, 2007-09-26 19:49
Tom is right. And as of 01/01/2008, no tax will apply to the earnings either- see http://www.retirementdictionary.com/Ordering-rules.htm and http://www.retirementdictionary.com/qualified-distribution-roth.htm.