By Andy Ives, CFP®, AIF®
IRA Analyst
QUESTION:
Do required minimum distributions (RMDs) need to be taken when a non-spouse beneficiary inherits Roth IRA? It seems this has been a point of confusion for some time.
ANSWER:
This is something that confuses a lot of people, and understandably so. The answer is – it depends on who the beneficiary is. Roth IRA owners are always deemed to have died before the required beginning date, regardless of age, because Roth IRAs have no lifetime RMDs. As such, annual RMDs do not apply during the 10-year payout rule when a Roth IRA is inherited by a non-eligible designated beneficiary (NEDB). This allows the inherited Roth IRA to continue to accumulate tax-free for the full 10-year term before the account must be emptied.
Confusion centers around the rules when an eligible designated beneficiary (EDB) inherits a Roth IRA. EDBs are permitted to use their own single life expectancy to leverage the full lifetime stretch on an inherited IRA. While there are no RMDs on an inherited Roth IRA within the 10-year period, there are RMDs on an inherited Roth IRA if an EDB elects the lifetime stretch. While an EDB can avoid the 10-year rule and stretch an inherited Roth IRA over his own single life expectancy, the tradeoff is that RMDs (even if non-taxable) must be taken annually by the EDB, starting in the year after the year of death.
QUESTION:
Can I do a qualified charitable distribution (QCD) to a donor advised fund?
https://irahelp.com/slottreport/inherited-roth-iras-and-qualified-charitable-distributions-todays-slott-report-mailbag/
