Permalink Submitted by Alan Spross on Mon, 2011-12-05 23:36
That is correct. The RMD rules are the same as for traditional IRAs for non spouse beneficiaries and the Roth owner is assumed to have passed prior to the RBD.
If the beneficiary limits the distributions to RMDs, it is extremely likely that the inherited Roth will be qualified and tax free long before the beneficiary taps into any earnings that would be taxable. But to properly report the RMDs on Form 8606 in the event the 5 year holding period has not been completed, the beneficiary must find out what the remaining balance of regular and conversion contributions is since Form 8606 requires these numbers.
The 5 year holding period begins with the first year the decedent contributed to any Roth IRA and continues after the decedent’s death.
Permalink Submitted by Alan Spross on Mon, 2011-12-05 23:36
That is correct. The RMD rules are the same as for traditional IRAs for non spouse beneficiaries and the Roth owner is assumed to have passed prior to the RBD.
If the beneficiary limits the distributions to RMDs, it is extremely likely that the inherited Roth will be qualified and tax free long before the beneficiary taps into any earnings that would be taxable. But to properly report the RMDs on Form 8606 in the event the 5 year holding period has not been completed, the beneficiary must find out what the remaining balance of regular and conversion contributions is since Form 8606 requires these numbers.
The 5 year holding period begins with the first year the decedent contributed to any Roth IRA and continues after the decedent’s death.