Inherited Spousal IRA
My client age 75, opened an inherited spousal IRA from his wife’s 403b. She died this year at age 68.
Can he now convert this to a ROTH?
My client age 75, opened an inherited spousal IRA from his wife’s 403b. She died this year at age 68.
Can he now convert this to a ROTH?
Permalink Submitted by Alan - IRA critic on Fri, 2021-11-12 18:31
Yes, he can assume ownership of the inherited IRA anytime. There is no year of death RMD for the inherited IRA since deceased spouse will not have reached 72 this year. However, client may not wish to incur a large tax bill this year for a full conversion of the inherited IRA balance even though this is the last year to file jointly at the lower tax rate. Client could do a partial rollover of the inherited IRA to a Roth IRA, and leave the rest as an inherited IRA from which no RMDs are required until 2025. He could repeat this process each year through 2024, doing partial conversions while managing the tax bills for the conversion amounts. Of course, the amount to convert and the tax bill will be affected by the balance of this inherited IRA.