Estate Tax Credit for ROTH IRA Distributions?
When a non spouse inheirits a TIRA that increased the estate beyond the exemption amount, the TIRA beneficiary can claim a tax credit on the distributions based on the pro rata share of the TIRA to the entire estate value.
Does this also apply for the non-spouse beneficiary of a ROTH IRA?
Permalink Submitted by Alan Spross on Wed, 2009-07-08 23:12
No, the estate tax deduction for the beneficiary is dependent on the inherited asset being included in income. An inherited Roth would usually be fully tax free, but in the event earnings are distributed prior to qualification, then those earnings would be included in income and generate a potential misc itemized deduction.
Permalink Submitted by Clyde Wolf on Thu, 2009-07-09 00:08
Alan-oniras,
Thanks for the quick reply!