{"id":45834,"date":"2019-08-05T14:03:56","date_gmt":"2019-08-05T19:03:56","guid":{"rendered":"https:\/\/resource-center.hrblock.com\/?p=45834"},"modified":"2021-08-09T12:04:49","modified_gmt":"2021-08-09T17:04:49","slug":"inheriting-an-ira","status":"publish","type":"post","link":"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/irs\/tax-responsibilities\/inheriting-an-ira\/","title":{"rendered":"Inherited IRA Rules"},"content":{"rendered":"

Editor\u2019s Note: <\/strong>After the passage of the Secure Act<\/a>, some rules around inherited IRA have changed. Learn more about what has stayed the same, and what has changed here.<\/em><\/p>\n

\"InheritedWhen you inherit an IRA from someone, you become the beneficiary of that account. Even if you\u2019re already familiar with all the rules for an IRA you contribute to, the rules for beneficiaries are a bit different. In some cases, you\u2019ll be able to avoid some of the penalties that go along with early withdrawals from other IRAs.<\/p>\n

Death and the Traditional IRA<\/h2>\n

Beneficiaries don\u2019t have to worry about the 10% early withdrawal penalty traditional IRAs have. This is true regardless of the IRA owner\u2019s or beneficiary\u2019s age. However, distributions from an inherited traditional IRA are taxable. This is referred to as \u201cincome in respect of a decedent.\u201d That means if the owner would have paid tax, the income is taxable to the beneficiary.<\/p>\n

If you inherit the IRA from your spouse, you have the option to treat the IRA as your own. So, you can defer the IRS required minimum distribution until you reach age 72 (70\u00bd if you reached 70\u00bd prior to January 1, 2020).<\/p>\n

If you\u2019re not a spouse (or you are a spouse but don\u2019t choose to treat the IRA as your own), you might still qualify to get distributions over an extended period of time if the IRA owner died before January 1, 2020. There are different rules and methods to apply, depending on whether the owner reached age 70\u00bd, but in any case, distributions must start by December 31 of the year after the owner died. That generally means if the owner died in 2019, you must take your first distribution by December 31, 2020. Otherwise, the entire IRA balance must be distributed within 5 years.<\/p>\n

If you inherit a traditional IRA from someone who died after December 31, 2019, the entire IRA balance must be distributed within 10 years. If you are the spouse you still have the option of treating the IRA as your own instead of following the 10-year rule. Additionally, there are exceptions if you are chronically ill, disabled, an underage child, or you are not more than 10 years younger than the IRA owner.<\/p>\n

Death and the Roth IRA<\/h2>\n

If you inherit a Roth IRA<\/a>, the money is usually tax-free if it\u2019s a qualified distribution. To be a qualified distribution, the money must have been in the Roth account for five years, including the years it was in the Roth account during the IRA owner\u2019s lifetime, before it\u2019s withdrawn. These rules also apply:<\/p>\n

If you inherit the Roth from your spouse, you can treat it as your own. So, there are no required withdrawals during your lifetime. However, if you\u2019re not the deceased\u2019s spouse, you\u2019ll need to take required minimum distributions following the same rules that apply to inherited traditional IRAs, including the 10-year rule exceptions mentioned above. If the five-year holding period has not been met, a portion of the distribution may be subject to tax and penalty.<\/p>\n

More Help With Inherited Retirement Accounts (And Tax Consequences of Them)<\/h2>\n

If you want help navigating how your taxes are impacted with inherited retirement accounts, connect with H&R Block. Learn about the many ways to file your taxes<\/a> now.<\/p>\n","protected":false},"excerpt":{"rendered":"

Editor\u2019s Note: After the passage of the Secure Act, some rules around inherited IRA have changed. Learn more about what has stayed the same, and what has changed here. When you inherit an IRA from someone, you become the beneficiary of that account. Even if you\u2019re already familiar with all the rules for an IRA […]<\/p>\n","protected":false},"author":658,"featured_media":52571,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[25,53],"tags":[],"class_list":["post-45834","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-irs","category-tax-responsibilities"],"acf":[],"yoast_head":"Inheriting an IRA | H&R Block<\/title>\n<meta name=\"description\" content=\"If you inherited an IRA, the tax rules can get complicated. 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