Child inheriting Roth IRA

Submitted by MIKE KRUCHTEN on Thu, 2024-09-26 16:50

Roth IRA owner possessed Roth IRA for 7 years and was age 45 when she deceased this year.

Her 14 year old son is 100% primary beneficiary to Roth IRA.

It’s my understanding the child can defer any Roth IRA distributions until age of majority(21). If accurate then I believe he would receive another 10 year period until age 31. If also accurate, seems the minor could defer any Beneficiary Roth IRA distributions until age 31 at which time the Roth IRA would need to be fully distributed.

Looking for input on the above being accurate and if not any explanation?



Submitted by Alan - IRA critic on Thu, 2024-09-26 20:15

Child is an EDB not subject to the 10 year rule until age 21, but must take annual beneficiary RMDs as an EDB. And those annual RMDs must continue even though the child is no longer an EDB at 21. But due to child’s young age the RMDs will be very small and because this is a Roth IRA, distributions are tax free and will not trigger kiddie taxes.

While child’s guardian could opt out of EDB treatment on child’s behalf and into the 10 year rule with no annual RMDs due, the account would have to be drained in 10 years rather than 17, which would probably be less beneficial.

Submitted by MIKE KRUCHTEN on Fri, 2024-09-27 06:12

Thank You and to understand the EDB RMD rules. Thou a Roth IRA, since child is an EDB that triggers annual RMD’s regardless if IRA is a Roth IRA?

I did hope at age 21 the RMD’s would pause for the 10 year period but this must be due to electing EDB treatment?

Submitted by Alan - IRA critic on Fri, 2024-09-27 10:40

Yes, inherited Roth RMDs are the same as for traditional IRAs except that all Roth owners pass prior to RBD. EDBs are subject to annual RMDs unless they opt out of EDB treatment and into the 10 year rule. The final Regs included the unexpected statement that the annual RMDs must continue after 21, even though the EDB period has ended.

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