RMD rules for inherited spousal ROTH pre-CV19
Hello gurus –
Spouse inherited a ROTH from her husband in 2013 when he passed away at age 74. She was the 100pct beneficiary. Account is still titled as a BEN IRA for her, and not titled as her own individual ROTH. Is there any requirement for an RMD from this inherited ROTH? The widow was taking out distributions for years, which were sizable, and would have met any RMD (if one were needed). In 2023 there have been no distributions. Hence the Q on is there any RMD needed given this is a ROTH. Thank you!
Permalink Submitted by Alan - IRA critic on Mon, 2023-12-11 18:22
If the spouse never assumed ownership of the inherited Roth, she would have still defaulted into ownership the first year that she fell short of her full beneficiary RMD. That would have erased the beneficiary RMD for the year she might have defaulted into ownership and for all later years. Likewise, if she took out enough in each past year to satisfy the beneficiary RMD for that year, she can still eliminate the 2023 beneficiary RMD by electing to assume ownership now and having the IRA properly retitled with her as owner is the better way to assume ownership. But if she does nothing (does not take out the 2023 beneficiary RMD) she will also default to ownership and the 2023 beneficiary RMD is erased. But for better clarity of the status, it is preferable for her to notify the Roth custodian that she elects to assume ownership. This is not a taxable event, and there is no downside from doing this. If she is at least age 59.5, her Roth will be fully qualified and tax free.
Permalink Submitted by Robert Bracey on Mon, 2023-12-11 19:57
Much thanks Alan !!