Inherited IRA- Must there be an annual distribution

Submitted by Vickie Intriago on Tue, 2023-01-31 16:01

54 year old Prospect insists she has no mandatory annual distributions from a ROTH IRA she inherited from her 86 year-old mother.
She claims Fidelity hasn’t mentioned anything this. She believes she has 10 years to withdraw the ROTH IRA funds. Mother died in May 2021.

Who is right? We only agree on the fact that distributions are tax free.



Submitted by Alan - IRA critic on Tue, 2023-01-31 16:20

  • She is correct. Because all Roth owners are treated as passing prior to RBD (since there is no RBD for a Roth IRA), if the beneficiary is subject to the 10 year rule, there are no annual RMDs in years 1-9. If she holds the inherited Roth for 10 years, it will have a chance to generate tax free gains. 
  • On the other hand, if prospect was disabled she would be an EDB not subject to the 10 year rule, but would have to take annual RMDs over her life expectancy.

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