Inherited IRA
IRA received as a beneficiary; distribution rules depend on beneficiary type and current law
An Inherited IRA is an IRA you receive as a beneficiary after the original owner dies. Distribution rules can be complex and depend on your relationship to the deceased, the IRA type (Traditional vs Roth), and current law.
The core idea (in plain English)
You inherit retirement assets, but you’re usually required to distribute them under specific timelines. Taxes depend on whether it was Traditional (often taxable) or Roth (often tax-free if qualified).
Why the rules matter
- Distribution timing can affect your annual taxable income and tax brackets.
- Deadlines vary by beneficiary type and current law.
Common pitfalls
- Missing required distribution steps or deadlines.
- Assuming Roth inherited assets are always tax-free regardless of holding rules.
Quick mental checklist
If you inherit an IRA, treat the distribution rules as a planning project — it’s common to consult a tax professional because mistakes can be costly.
Official resources
Educational only. Always confirm eligibility, limits, and plan rules with IRS guidance or plan documents.