topic Inherited Roth IRA in Retirement tax questions

Inherited Roth IRA

Latwig1 — Fri, 07 Feb 2020 16:24:30 GMT

I inherited a Roth IRA from my father. I took a gross distribution of all the funds, the 1099R is stating that @$7K is taxable. The distribution code on the 1099R is 4D. From what I have been reading, and I may be misunderstanding this, but if this Roth has been in place for over 5 years, I thought none of it was taxable income? This IRA has been in place for over 30 years, my Dad passed at 93. Box 5 has a number in it that equals about half the total distribution.

Re: Inherited Roth IRA

macuser_22 — Fri, 07 Feb 2020 16:53:16 GMT

@Latwig1 wrote:

I inherited a Roth IRA from my father. I took a gross distribution of all the funds, the 1099R is stating that @$7K is taxable. The distribution code on the 1099R is 4D.

A code "4D" indicates that it is NOT a Roth IRA but is a non-qualified annuity. (if an inherited Roth IRA the box 7 code would be a "T". )

You should contact the issuer of the 1099-R to find out jut what type of account this actually is or if there is an error on the 1099-R which they must correct with a replacement 1099-R.

Re: Inherited Roth IRA

Latwig1 — Fri, 07 Feb 2020 17:55:56 GMT

if this were an annuity, would that make it taxable?

Re: Inherited Roth IRA

dmertz — Fri, 07 Feb 2020 18:17:57 GMT

A code 4D Form 1099-R would have the taxable amount shown in box 2a unless box 2b Taxable amount not determined is marked. The portion of the distribution that is nontaxable would then be shown in box 5.

It's extremely likely that at least some portion of this distribution is nontaxable, perhaps all of it is nontaxable. If box 2b Taxable amount not determined is marked, you'll need to do research to determine the taxable amount, starting with the insurance company that made this payment to you.

Re: Inherited Roth IRA

Latwig1 — Fri, 07 Feb 2020 18:27:51 GMT

thank you