IRA’s & Roth’s
Have a client who has passed. He was 89 years of age (as is his spouse) and maintained both a ‘Traditional IRA’ and a ‘Roth IRA’. The RMD for this calendar year (2015) has already been met and the ‘Roth IRA’ is fully aged …
The spouse simply wants to rollover the assets from the retirement accounts described above to accounts in her name (being the named bene and spouse).
My question is – Is there anything needed to do moving forward with the ‘Roth IRA’, being that she was not the original owner of the account. In other words, does that account need to start taking funds out ? And being that it is a ‘Roth IRA’, there are no tax consequences, correct ?
First time, I have run into this …
Thanks for your input !!!
Gregg
Permalink Submitted by Alan - IRA critic on Mon, 2015-08-17 18:32
Gregg, when the surviving spouse inherits a Roth IRA and rolls it over, they are not only treated as the owner but are treated as if they owned the Roth IRA all along. There are no RMDs due for the Roth but any distributions she takes will be tax free. As has been the case, these Roth distributions are only reported on line 15a of Form 1040. Of course, she should name her own beneficiaries on these accounts ASAP.