Inherited Roth IRA’s
My client 53 years old inherited his mothers Roth IRA in 2009. Inheirited IRA was retitled correctly keeping his mothers name and date of death. No RMD was taken in 2009 do to one year hiatus on RMD’s. RMD must be taken this year 2010. Question, Roth was established over 5 years ago and clients mother was age 82. Can son receive more than yearly RMD amount tax free? Are any future withdrawals 100% tax free?
Permalink Submitted by Edward Czapor on Mon, 2010-02-08 17:03
Yes all disributions are qualified because of death of owner and the 5 year holding is satisfied. Any amounts above the RMD will be tax free including any future amounts.
Permalink Submitted by Bill Cooper on Mon, 2010-02-08 17:35
Thats great. Then the real criteria for the tax free distributions to beneficiaries is that the Roth IRA be established for 5 years or longer. The age of the beneficiary does not matter.
Permalink Submitted by Edward Czapor on Mon, 2010-02-08 18:17
That is correct, and the age of the owner also does not matter because it is a Roth. With a TIRA a beneficiary who is older than the IRA owner uses the owner’s age if death occurred after RBD. But since Roth owners are considered to have died before RBD regardless of age, this does not apply.