Roth IRA for Beneficiary
Grandfather opened a Roth IRA via a Roth conversion in 2023. He has now passed away. Does the 5 year Rule waiting period still apply to the beneficiary?
Grandfather opened a Roth IRA via a Roth conversion in 2023. He has now passed away. Does the 5 year Rule waiting period still apply to the beneficiary?
Permalink Submitted by Alan - IRA critic on Tue, 2024-09-17 18:31
Yes, the inherited Roth will not be qualified until 2028. But because Roth owners pass prior to their RBD, there are no annual RMDs in years 1-9 of the 10 year rule. In addition, the entire amount converted is available anytime tax and penalty free. It is only the earnings generated in the Roth IRA that will be taxable if withdrawn prior to 2028, and earnings come out last. Beneficiary will have to complete Form 8606 if a distribution is taken prior to 2028, but not after the Roth is qualified,