Inherieted IRA Distributions
All of my distributions from my inherited ira are taxed as income. Is that considered “earned income” that i can use to open my own personal roth ira or traditional ira??? I am 51, not working and have no other income and want to invest $6000 a year into primarily a roth.
Thx for all the help
Permalink Submitted by Alan Spross on Tue, 2012-01-10 21:48
Also, see other post.
The IRA distributions are not considered earned income, so you cannot make regular IRA contributions of any type.
It is not clear whether a Roth IRA is best for you vrs a traditional IRA. However, if you have a traditional IRA now (not the inherited IRA), you can convert some or all of it to a Roth IRA and use the RMDs to pay the taxes. Under present law you cannot convert an inherited TIRA to an inherited Roth IRA, but that may change at some point in the future.
Permalink Submitted by Ira Spondre on Tue, 2012-01-10 22:02
Anybody have any advice on any other alternative investments that have some sort of tax advantage if my income is not considered “qualified income” and i cant invest in a IRA
Permalink Submitted by Lee Martinson on Wed, 2012-01-11 18:03
Investments that have capital gains may be tax advantaged and annuities may be tax advantged, but as I mentioned in the other post, it depends on your situation.
Lee