dmertz
Level 15

Retirement tax questions

You can only consolidate beneficiary IRAs that come from the same owner and for which the RMD is calculated the same way.  If they meet these requirements, the accounts can be transferred trustee-to-trustee into a single account.  They cannot be moved by distribution and rollover to another beneficiary Roth IRA.

If you do not need to spend the money, there is no reason to take more money from the beneficiary Roth IRAs than is required, allowing the remainder to continue to grow tax and penalty free.  (Distributions you make before 5 years after the beginning of the year for which your father first made a Roth IRA contribution are taxable to the extent that the distribution come from earnings in the account rather than from original contributions and conversions.  Distributions come first from original contributions and conversions, so it's unlikely that any amount would be taxable if you took only RMDs.)

You can also calculate the RMD amounts determined for each of the beneficiary Roth IRAs and take the combined total from any one of the beneficiary Roth IRA under the same restrictions under which you could consolidate these accounts.  This would allow you to drain one of the IRA accounts before the others even if you chose not to consolidate the accounts.

Be sure to name your own designated beneficiary(s) for the beneficiary Roth IRAs so that your beneficiary(s) can continue the RMD schedule that you are required to follow, otherwise, most Roth IRA custodial agreements require that the beneficiary Roth IRAs be distributed to your estate, ending the stretch.

These are all things that a competent tax advisor should make you aware of.

See IRS Pub 590-B, Distributions After Owner's Deathhttps://www.irs.gov/publications/p590b/ch02.html#en_US_2015_publink1000231084

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