5 Year Rule for spousal beneficiary
Husband rolls to Roth and dies during his 5 year holding period. Does the spouse who does a spousal rollover start a new 5 year period, or does she get credit for the number of years that the husband held the Roth? What if she does not do a spousal rollover, but, instead, takes the Roth as a beneficiary?
Bill V
Permalink Submitted by Alan Spross on Sat, 2010-01-16 02:46
The surviving spouse assuming ownership of the inherited Roth is treated as if they owned it all along. So effectively this makes the holding period the longer of the survivor’s own Roth or the one they assumed ownership of.
But if the survivor maintained their interest as a beneficiary, then the survivor would be limited to the holding period started by the decedent. If they owned a separate Roth, that holding period would not apply to the inherited Roth. Some Roth agreements make ownership automatic for the surviving spouse.