Inherited Roth IRA; transfer and initial RMD

Submitted by tomtom on Tue, 2018-12-04 13:34

Good morning Alan et.al.,
Dear MIL passed recently, yesterdays accounting review reveals a qualified Roth IRA which will be inherited equally by her 3 children. There are no other IRA assets. Please advise on the specifics of the re-title, and RMD for this year.
Your insights are most appreciated.



Submitted by Alan - IRA critic on Tue, 2018-12-04 15:52

  • There is no RMD for 2018 for MIL since this is a Roth IRA. The first beneficiary RMDs will be for 2019 based on each beneficiary’s share of the inherited Roth balance on 12/31/2018. The 3 children should establish separate inherited Roth IRA accounts no later than 12/31/2019 as that will enable each of them to use their own life expectancy for their beneficiary RMDs. Note that even though this is a Roth IRA, non spouse beneficiaries must take RMDs and the calculation is the same as it would have been for an inherited TIRA (Table I).  All distributions to beneficiaries will be tax free and need only be reported on line 4a of Form 1040.
  • The retitling format required by the custodian will be acceptable. It must include both MILs name and the respective beneficiary’s name.

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