Stretch – ROTH distributions Mandatory?
My client has received $100,000 from his mom’s Roth IRA. Is he subject to mandatory distributions based on his age schedule or can he continue to let it grow tax free?
My client has received $100,000 from his mom’s Roth IRA. Is he subject to mandatory distributions based on his age schedule or can he continue to let it grow tax free?
Permalink Submitted by Denise Appleby on Wed, 2007-08-22 15:01
Roth IRA beneficiaries are subject to the RMD rules…
He is likely subject to the RMD rules, based on his life-expectancy. Check the IRA agreement to make sure they have not limited him to the five year option. Most IRA agreements default to the life-expectancy option-…but some require the beneficiary to either make that election, or be subject to the five year provision by default.
Under the life expectancy option, he is required to begin RMDs by 12/31 of the year following the year she died. RMD amounts are required to be calculated using his non-recalculated single life expectancy.
Five year rule defined: http://retirementdictionary.com/Five-Year-Rule.htm