Beneficial Roth IRA
My wife passed away, I am the Beneficiary of here Roth IRA. At the time of her death she was 72. I am 76. The account is held by a Brokerage firm that says that they can only convert the account to a traditional account in my name. While I believe that this is not really the case what are my other options. Can I roll the account over to a Roth IRA, either a new one or one that exists in my name? Is there any RMD on those funds??
Thanks
Dean
Permalink Submitted by Alan Spross on Thu, 2012-10-04 17:11
Sorry to hear of your loss. As Tom indicated, the opinion you received from the broker is totally incorrect.
You should roll the inherited Roth IRA over to your own Roth IRA. You will be treated as the owner from that point on and not as the beneficiary. You will have no RMDs to take. You can roll it to a new Roth IRA or into an existing Roth IRA if you already have a Roth of your own. There is no advantage of keeping the Roth in inherited form since that would require you to take RMDs.
With respect to the taxation of any distributions you would take, you need to determine if your wife’s first Roth contributions were done prior to 2008, or if your own Roth was opened before 2008. If so, then your Roth has been held for over 5 years and is fully qualified and tax free. Basically, you are treated as if YOU owned her Roth all along.