- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Retirement tax questions
The fact that the money being distributed from the Roth IRA came from an annuity death-benefit has no bearing on determining the taxable amount of the distribution. If the distribution is a qualified Roth IRA distribution, the distribution is non-taxable. Since the Roth IRA participant has died, the distribution is a qualified distribution if the distribution is made more than 5 years after the beginning of the year for which the participant first made a Roth IRA contribution.
If the distribution is not a qualified distribution because it has has not been 5 years since the beginning of the year for which the deceased participant first made a Roth IRA contribution, the taxable amount must be calculated on Part III of a Form 8606 with regard to only the Roth IRAs inherited by this beneficiary from this participant. Along with the Roth IRAs, the beneficiary will have inherited a proportional amount of the participant's Roth IRA contribution and conversion basis to be used on Part III.
See Are Distributions Taxable in IRS Pub 590-B:
https://www.irs.gov/publications/p590b#en_US_2018_publink1000231057