@SPQ wrote:
@KrisD15
Thank you for answering, but could you please check that link? I don't see anything on that page about inherited IRAs. Further info: I'm a child of the deceased, not disabled, not young, and I know I need to take it out within 10 years of the year the parent died. I just want to get the reporting right.
It's a general link about why Turbotax asks about Roth IRAs.
However, the answer is correct. Any kind of inherited IRA is kept separate and not included when performing calculations relating to your own IRAs.
[Corrected, see below]
Also note, starting in 2025, you may be required to take an RMD from the Roth IRA. The withdrawal will not be taxable but it must be taken and reported. Under the SECURE Act (passed in 2020 but the regulations are only taking effect in 2025), you must take an RMD from an inherited Roth IRA if the owner was past their RMD beginning date. You must also spend out the account within 10 years. If the owner was not past their RMD beginning date, you do not have to take RMDs, but still must empty the account within 10 years. The regulations take effect in 2025 and people who did not take RMDs from 2021-2024 will not be penalized even though they were technically required.
Your RMD is based on the single life expectancy table in publication 590-B.
https://www.irs.gov/publications/p590b#en_US_2023_publink100089977
For example, if the owner was past their beginning age, and you were 50 years old the year after they died, your life expectancy would be 36.2. In future years, you subtract 1 year, rather than looking up a new life expectancy number (35.2, 34.2, etc.). So your RMD for 2025 would be the ending balance on 12/31/2024 divided by your life expectancy number calculated as I described.
[Edited to add:]
I am incorrect on the RMD issue. The IRS says that inherited Roth IRAs follow the same rules as inherited traditional IRAs. The rule for inherited traditional IRAs is that the beneficiary must take RMDs if the original owner was past their RMD beginning date. Since Roth IRAs do not have an RMD beginning date, the beneficiary is not required to take an RMD because the original owner was never "past their RMD beginning date" (because there was no such date).
As a great bureaucrat once said, "technically correct is the best kind of correct."
