Inherited Roth IRA…
I inherited a Roth IRA from a friend this year. on the discussion of withdrawal, does the 5 year window for withdrawal begin with the account opening for me or the deceased? Both myself and deceased were less than age 59 and a half.
Permalink Submitted by Alan - IRA critic on Wed, 2019-04-03 18:18
The 5 year holding period starts 1/1 of the year that the decedent first made a Roth contribution. Once that is completed the entire inherited Roth will be qualified. Your age does not matter here. You will probably choose life expectancy RMDs and if you must take an RMD or other distribution before the 5 year holding period has been reached, your distribution will probably still be tax free because the basis of regular and conversion contributions will come out first and these are non taxable. However, you would need to determine the balances for these contributions in order to be able to report your RMD or other distribution on Form 8606. There is never a 10% penalty on any distribution from an inherited account.