Here is what you need to know if you inherited an IRA from someone who is not your spouse:
- Consider all your options before doing anything with your inherited IRA - If you inherit an IRA, you need to move cautiously. You have time to make decisions, so don’t rush.
- You cannot contribute to your inherited IRA - If you already have your own IRA, you cannot add those funds to the Inherited IRA or vice versa.
- You can transfer your inherited IRA - Be sure to move the account by direct transfer.
- You may be able to do a Qualified Charitable Distribution.
- You cannot convert your inherited IRA to a Roth IRA.
- You will be subject to Required Minimum Distributions.
- Your distributions may be taxable, but there will be no 10% early distribution penalty.
- You should name a successor beneficiary - When you inherit an IRA, it makes sense to name a beneficiary.
If you have an inherited IRA, you need to read this article to be fully informed about your options and restrictions.The above summary and the linked article are copyright © 2020, Ed Slott and Company, LLC Reprinted from The Slott Report, 16 Sep 2020, with permission. https://www.irahelp.com/slottreport/8-things-you-need-know-about-your-inherited-ira Ed Slott and Company, LLC takes no responsibility for the current accuracy of this article.