Roth Distributions

Technical topics regarding tax preparation.
#1
philly  
Posts:
1722
Joined:
14-Sep-2014 4:48am
Location:
New York
Son, 50 years old, inherited a ROTH from his mother who deceased and was 86 years old. The mother held the ROTH for over 5 years. If the son takes a distribution from the ROTH is there an exception to the 10% penalty and the taxability of the interest income?
 

#2
Posts:
1121
Joined:
12-May-2021 11:01am
Location:
Alabama
Yes. Sec. 72(t)(2)(A)(ii). All inherited accounts are exempt.
 

#3
mariaku  
Posts:
364
Joined:
11-Jul-2014 1:19pm
Location:
Oakland, CA
But if he does need the funds, he is better of stretching it out to the full 10 years, as all the earnings will continue being tax-free.
 

#4
Posts:
1199
Joined:
3-Sep-2021 4:01pm
Location:
OH
philly wrote:Son, 50 years old, inherited a ROTH from his mother who deceased and was 86 years old. The mother held the ROTH for over 5 years. If the son takes a distribution from the ROTH is there an exception to the 10% penalty and the taxability of the interest income?


When did he inherit the ROTH. I believe there was an exception last year that allowed for an inherited ROTH to be exempt from the 10 year rule.
 

#5
philly  
Posts:
1722
Joined:
14-Sep-2014 4:48am
Location:
New York
I believe he inherited the Roth a few years ago. His financial planner said that he was subject to the 10 year rule.
 


Return to Taxation



Who is online

Users browsing this forum: alwayslost, artp, beardenjv, ChrisGCPA, deniz, Google Adsense [Bot], GRobCPA, JAD, kyle242gt, ny110010001, TAXMASTER, taxtothebest, Trailman423 and 197 guests