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posted Apr 11, 2025 3:02:00 PM

Royalty Trust in Roth IRA - How to handle dividends

I understand that a "Royalty Trust" is a passthrough entity and that the income generated is "passed through" to the IRA.  Does that mean the annual dividends from a Royalty Trust held in a Roth IRA are immediately taxable in the year they are received?  If so, how would that be handled in your annual tax returns?

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1 Replies
Expert Alumni
Apr 24, 2025 10:07:04 AM

No, they are not taxed if the trust is held inside the IRA.  Earnings are not taxable inside a ROTH IRA.

 

@WorthingtonOH