It's also important to know if your husband died before April 1, 2023 which was his Required Beginning Date (RBD) for RMDs if he reached age 72 in 2022.
Don't be in a hurry to do anything with these inherited IRAs, you have until the end of 2024 to decide what to do. Take the time to understand everything regarding your options and obligations. However, if your husband reached age 72 in 2022 and died on or after April 1, 2023, you must complete your husband's 2023 RMD if he had not already done so. The regular deadline for taking that RMD is December 31, 2023, but you get an automatic extension to the due date of your 2023 tax return, including extensions, to complete that RMD without penalty.
1 and 2. A spouse under age 59½ would usually keep the traditional IRA as an inherited IRA so that distributions from the inherited traditional IRA would be penalty-free if taken before reaching age 59½. You as spouse beneficiary would be an Eligible Designated Beneficiary and be required to take distributions based on your single life expectancy. However, if the deceased spouse died before their RBD, you can opt into the 10-year rule and avoid annual RMDs until 2033. Anytime prior to 2033 you could assume ownership of the IRA and treat it as your own by trustee-to-trustee transferring the inherited IRA into your own. Opting into the 10-year rule would make sense if you will be reaching age 59½ before 2033, which I understand to be the case, or, even if you would not reach age 59½ before 2033, you know that you will not need distributions from the inherited traditional IRA between January 1, 2033 and the date that you reach age 59½. Regardless, of the above, when you know that you will not need to spend any more money from the traditional IRA, it would likely make sense to assume ownership of the traditional IRA to stop any beneficiary RMDs. You will be treated as owner the entire year that you assume ownership.
3. In almost all cases it makes sense for a spouse beneficiary to treat an inherited Roth IRA as the surviving spouse's own. In your case the 5-year qualification period has been met, so you would only have to wait until age 59½ to take out earnings without tax and penalty. Earnings come out last. Contribution basis comes out first, free of tax and penalty. Only if you expect to need to spend the earnings in the Roth IRA before you reach age 59½ might it make sense to leave the Roth IRA as an inherited Roth IRA so that any distribution will be free of tax and penalty.
4. You are never subject to a 10% early-distribution penalty on distributions from an inherited IRA. If you assume ownership of the IRA, any taxable amounts distributed to you before you reach age 59½would be subject to the 10% early-distribution penalty (absent any other penalty exception).
fanfare is right, things used to be so much simpler before the SECURE Act added so many complications.
