dmertz
Level 15

Deductions & credits

Even if you could do an HFD from an inherited IRA, it makes absolutely no sense to do so.  The only reason to do an HFD is to avoid an early distribution penalty, and there is already no early-distribution penalty on a distribution from an inherited IRA.  The same is true for someone over age 59½ wishing to fund their HSA with the proceeds of a distribution from their own IRA.

 

As Opus 17 indicated, in this situation you would simply make a distribution from the inherited IRA and make a regular deductible personal contribution to the HSA.  The deduction from the HSA contribution will offset the taxable income from the inherited IRA.