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What are tax rules for an inherited Roth IRA, GA, the

What are tax rules...

What are tax rules for an inherited Roth IRA

Accountant's Assistant: Since estate law varies from place to place, can you tell me what state this is in?

GA

Accountant's Assistant: What documents or supporting evidence do you have?

The account documents

Accountant's Assistant: Anything else you want the lawyer to know before I connect you?

It is $3,000,000

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Answered in 9 minutes by:
10/20/2017
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,853
Experience: Taxes, Immigration, Labor Relations
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Distributions from Roth IRA are NOT taxable for beneficiaries as long as that IRA was established at least 5 years before distribution.

The 5-year period beginning with the first taxable year for which a contribution was made to a Roth IRA set up for the owner's benefit.

When the distributions are made before the end of the applicable 5-year period for a qualified distribution, each beneficiary includes a part of distribution attributable to earning $500 into taxable income. The 10% additional tax on early distributions does not apply because the distribution was made to the beneficiaries as a result of the death of the IRA owner.

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RMD - required minimum distributions are established for Roth IRA the same way as for traditional IRA.

If a Roth IRA owner dies, the minimum distribution rules that apply to traditional IRAs apply to Roth IRAs as though the Roth IRA owner died before his or her required beginning date.

Generally, the entire interest in the Roth IRA must be distributed by the end of the fifth calendar year after the year of the owner's death unless the interest is payable to a designated beneficiary over the life or life expectancy of the designated beneficiary.

If the sole beneficiary is the spouse, he or she can either delay distributions until the decedent would have reached age 70 1/2 or treat the Roth IRA as his or her own.

Let me know if you need any help with reporting.

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Customer reply replied 7 months ago
What is more valuable if inherited:
a regular stock portfolio or a portfolio within a Roth IRA?

For some reason you provided negative rating that affect my performance badly...

I think I provided a complete and detailed answer and are open for additional questions.

Please reconsider your rating.

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Customer reply replied 7 months ago
what about my question ???

At the time of inheritance - there is no difference stock portfolio in a regular investment account and within a Roth IRA because Roth IRA distributions are not taxable and inherited assets get stepped up basis.

But if we are looking to keep investment portfolio - at least for some time - you may continue investing inside Roth IRA and still have additional investment income tax free - that would make Roth IRA more valuable.

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,853
Experience: Taxes, Immigration, Labor Relations
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Customer reply replied 7 months ago
Thank you good information
I’ll change rating
Customer reply replied 6 months ago
Can a Roth IRA be funded with stocks from a regular investment portfolio?

That is not allowed to contribute assets into either traditional or Roth IRA.
You will need to sell shares and contribute the money.

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Customer reply replied 6 months ago
thanks
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Lev
Lev
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Satisfied Customers: 32,853
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Experience: Taxes, Immigration, Labor Relations

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