I inherited a Roth IRA which was opened 20+ years ago from a non spouse. The account contains 1 security, and the rest is cash. For simplicity, lets say the original account contained $10k cash, which I've since placed into an "inherited ROTH" account. I'm aware that I won't pay tax on the current $10k if I were to take a lump sum today, but what if I were to buy and sell securities at this point (post death of the original account owner)? Are the post death securities transactions taxable? For example, suppose tomorrow I took the entire $10k and bought a security, then 9 years from now (I fall under the 10 year rule) the $10k had grown to $25k. Would the $15k be tax free or will it be considered income to me since the original account owner wasn't the one that purchased / sold the securities that made the gains?
Because it has been more than 5 years since the beginning of the year for which the decedent first made a Roth IRA contribution, any distribution from the inherited Roth IRA will be nontaxable.
Under the 10-year rule, no distributions are required from an inherited Roth IRA until the end of the 10th year following the year of death, so you could take a single distribution at the end of the 10th year and that distribution will be entirely free of tax.
Because it has been more than 5 years since the beginning of the year for which the decedent first made a Roth IRA contribution, any distribution from the inherited Roth IRA will be nontaxable.
Under the 10-year rule, no distributions are required from an inherited Roth IRA until the end of the 10th year following the year of death, so you could take a single distribution at the end of the 10th year and that distribution will be entirely free of tax.
You have 10 years to invest that Roth for growth.
Whatever you can accomplish is tax-free.
Invest wisely.