Deceased Roth investor
Client died 4 years ago. The Roth account has not be in existence for five years. Am i correct that beneficiaries ( EDB or otherwise ) will have to wait one more year before earnings will be tax free upon distribution. thank you
Permalink Submitted by Alan - IRA critic on Thu, 2021-05-06 15:41
The required 5 year holding period includes that of the owner plus that of the beneficiary. Therefore it begins on Jan 1 of the year for which the first Roth contribution was made by the owner. The DOD does not matter with respect to the holding period, but the death replaces the requirement of reaching 59.5.