dmertz
Level 15

Retirement tax questions

That reference doesn't really answer the question, and don't trust any tax advice you get from an IRA custodian, particularly if the custodian is a bank.

 

If your mother had any Roth IRA before 2017, the inherited Roth IRA is qualified and any amount can now be distributed tax free.

 

If this conversion established your mother's first Roth IRA, the amount converted (likely most or all of the present value given today's market conditions) can be distributed without tax or penalty.  Any amount beyond the amount converted would be earnings that would be taxable if distributed before 2027.

 

Given the potential for tax-free growth, it's often beneficial to leave the money in the inherited Roth IRA as long as possible.  Since your mother died in 2022, you have until December 31, 2032 to completely distribute the Roth IRA.  Until then, no distributions are required.  (It would be a bit longer before the inherited Roth IRA would need to be drained if you are an Eligible Designated Beneficiary because you have not yet reached the age of majority, are disabled or are chronically ill but annual RMDs would be required.  If you are an EDB you have the option of opting out of EDB status and into the 10-year rule.)