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Have you inherited an IRA? Here are the rules regarding required distributions and taxation.

Posted by Nina Whitehurst | Jul 23, 2019 | 0 Comments

With an Inherited IRA, you need to take annual distributions no matter what age you are when you open the account.

Inherited IRA distribution rules:

  • Generally, you must take distributions during your lifetime or within five years after the original account holder passed away.
  • With an Inherited Traditional IRA, you'll pay taxes on any distributions you take.
  • Rollover, SEP, and SIMPLE IRAs become Inherited Traditional IRAs.
  • With an Inherited Roth IRA, you don't pay taxes on distributions.
  • To evaluate the potential impact an inheritance might have on your overall tax situations, we recommend you also consult your tax advisor.

This website explains the rules in greater detail and in a user-friendly way:

https://www.schwab.com/public/schwab/investing/retirement_and_planning/understanding_iras/inherited_ira/withdrawal_rules

 

About the Author

Nina Whitehurst

Attorney at Law Nina has been practicing law for over 30 years in the areas of estate planning, real estate and business law She is currently licensed in Alaska, Arizona, California, Colorado, Oregon and Tennessee. Her Martindale-Hubbell attorney rating is the highest achievable: 5 stars in peer...

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