inherited ROTH IRA ROLL OVER

Submitted by Ponni Nainar on Tue, 2015-09-29 14:47

As a non-spousal beneficiary. the mother of a deceased ROTH IRA owner inherited a roth ira. She wants to liquidate the funds from the inherited IRA and roll them into a roth IRA in her name. The original IRA owner has held the account for more than 5 years and all distributions are qualified.

Can she open a roth IRA in her own name within 60 days of getting the distribution from her inherited IRA or can she only make a trustee to trustee transfer of the funds into a new inherited IRA and not a roth ira in her own name?

Please advise.



Submitted by Alan - IRA critic on Tue, 2015-09-29 16:56

  • As a non spouse beneficiary, she cannot roll over any of the balance to her own IRA. She also cannot do any indirect 60 day rollovers. She should have the balance transferred directly to an inherited Roth IRA and then she can take life expectancy RMDs (or take more than the RMD) from the inherited IRA starting by the end of the year following Roth owner’s death.
  • Since this is a Roth IRA, her RMD divisor cannot be based on the age of the Roth owner who is younger because a Roth owner is always deemed to pass PRIOR TO their required beginning date because the owner did not have a beginning date since there are no RMDs for Roth owners. She must use her own life expectancy for the inherited Roth RMDs OR
  • She can use the 5 year rule under which there are no annual RMDs, but the entire inherited Roth must be drained by the end of the 5th year following the year of owner’s death.

Submitted by Ponni Nainar on Wed, 2015-09-30 13:59

Thanks for your reply.

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