Inherited IRA
Husband dies in 2008 at the age of 78 and his wife takes over his Roth IRA as an Inherited Roth IRA. She takes annual distributions from this account until her passing in 2021 at the age of 88. Their son inherits the inherited Roth IRA. How are distributions calculated going forward.? Does the account have to be depleted over 10 years?
Permalink Submitted by Alan - IRA critic on Thu, 2024-11-14 11:41
Unless she needed the funds, she should have assumed ownership of the inherited Roth IRA, being over 59.5 when she inherited. That would have eliminated the beneficiary RMDs she has been taking, and the son could then have been a designated 10 year rule beneficiary rather than a successor beneficiary. As a successor beneficiary, he must continue mother’s RMD schedule reducing the divisors by 1.0 each year. His divisor for 2022 would have been 5.6, then 4.6 for 2023, 3.6 for 2024, etc. This will drain the inherited Roth IRA in 2027, and while he is also subject to the 10 year rule the inherited IRA will not last that long. That said, the IRS has waived the 2022-2024 beneficiary RMDs for the son, but he must resume RMDs in 2025 using the divisor of 2.6.
All that said, if it can be documented that mother failed to complete her beneficiary RMD in ANY year after 2009, she would have defaulted to ownership of the Roth IRA in that year. Son would then be a designated beneficiary and would have no beneficiary RMDs and must only drain the inherited Roth by 2031. Son might want to research her distribution history to determine if mother fell short of her RMD in any year.