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Retirement tax questions
The question was whether there would be any penalty. Distributions to a non-spouse beneficiary of an inherited IRA, traditional or Roth, are never subject to an early-distribution penalty.
macuser_22's reply instead answers the question as to whether or not the distribution to the beneficiary would be a qualified distribution. Until it has been at least 5 years since the beginning of the year for which the decedent first made a contribution to a Roth IRA, any distribution of earnings accrued within the Roth IRA are taxable. Earnings come out last, so this is generally not a problem since the earnings are not required to be distributed before the 5-year period is met.
‎November 11, 2020
2:37 PM