Q.
Can an Inherited IRA be reinvested into one with better
returns?
A. Yes and no. The account must remain
registered as an inherited IRA (e.g. The inherited IRA of Jane Smith for the
benefit of Mary Smith). But it can be transferred to a different custodian (broker).
More simply, the current custodian probably has other investments, you can move
the money to, within the existing account
.Q.Can RMDs be contributed to Individual IRA
tax free?
A. No. An RMD cannot be rolled over to
another IRA. It must be removed from the IRA, period.
Q. Are
RMDs taxed at time of distribution?
A. Yes and taxed as ordinary income (no
special tax treatment, like capital gains). A form 1099-R will be issued for
the distribution.
