Roth 5 year holding period

Submitted by Richard Kehoe on Mon, 2023-08-07 16:10

If the owner of a Roth account dies and the spouse is the beneficiary does the 5 year holding period start over or this the spouse inherit the holding period of the of the Roth account holder?



Submitted by Alan - IRA critic on Mon, 2023-08-07 16:55

  • If the surviving spouse assumes ownership of the inherited Roth, the holding period is the longer of that of the decedent or any Roth IRA that the surviving spouse has owned all along. However, the age of the surviving spouse then determines the age requirement (59.5) for the Roth to be qualified. 
  • If the surviving spouse instead maintains the inherited Roth as the beneficiary, the holding period began with the decedent’s first Roth IRA contribution, and beneficiary RMDs are not required until the year the decedent would have reached 73.
  • Therefore, the surviving spouse would eventually have to assume ownership to avoid beneficiary RMDs, which may or may not be taxable.

Add new comment

Log in or register to post comments