Inherited Spousal IRA-Conversion to Roth
A husband dies before age 59 1/2 and beneficiary of his IRA is wife who is also under 59 1/2. She has treated the IRA as an inherited IRA (not her own) so she can take distributions without penalty since the IRA comprises 95% of her assets. If she wanted, although not our recommendation, could she convert a portion of the inherited IRA to a Roth? Thanks.
Permalink Submitted by Alan Spross on Tue, 2010-03-02 20:34
Yes, she could just take a distribution from the inherited IRA and roll it into her Roth IRA. The conversion income from 2010 conversions can be reported equally in 2011 and 2012.
But if she taps those Roth conversion funds within 5 years, unless she reaches 59.5, she will owe the 10% early withhdrawal penalty. She would also accelerate the income reporting for a deferred 2010 conversion if she taps the Roth prior to 2012.