Technical topics regarding tax preparation.
29-Nov-2021 1:58pm
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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?
29-Nov-2021 2:14pm
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Yes. Sec. 72(t)(2)(A)(ii). All inherited accounts are exempt.
2-Dec-2021 8:44pm
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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.
2-Dec-2021 9:12pm
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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.
3-Dec-2021 4:15am
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I believe he inherited the Roth a few years ago. His financial planner said that he was subject to the 10 year rule.
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