Spouse Inherited Roth "Same as mine" and 5-Year Rule

Submitted by Gordon Laing on Thu, 2023-09-28 04:15

When my spouse died at age 73 in 2021, since I was
the same age and sole beneficiary, I inherited her Roth and
selected “treat same as mine”. I directly transferred her Roth
into a new Roth created in my name.

Did those actions start a new 5-year rule or not ?

{ I’ve tried to find an IRS Citation, or clearly stated
third party opinion without success. If you have
a source, I’d greatly appreciate it. }

Thanks for your thoughts.

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Permalink Submitted by David Mertz on Thu, 2023-09-28 12:10

From CFR 1.408A-6:
Q-7. Is the 5-taxable-year period described in A-1 of this section redetermined when a Roth IRA owner dies?
A-7. (a) No. The beginning of the 5-taxable-year period described in A-1 of this section is not redetermined when the Roth IRA owner dies. Thus, in determining the 5-taxable-year period, the period the Roth IRA is held in the name of a beneficiary, or in the name of a surviving spouse who treats the decedent’s Roth IRA as his or her own, includes the period it was held by the decedent.
(b) The 5-taxable-year period for a Roth IRA held by an individual as a beneficiary of a deceased Roth IRA owner is determined independently of the 5-taxable-year period for the beneficiary’s own Roth IRA. However, if a surviving spouse treats the Roth IRA as his or her own, the 5-taxable-year period with respect to any of the surviving spouse’s Roth IRAs (including the one that the surviving spouse treats as his or her own) ends at the earlier of the end of either the 5-taxable-year period for the decedent or the 5-taxable-year period applicable to the spouse’s own Roth IRAs.