Mother died in 2005 at the age of 62, son inherited her Traditional IRA, father is still living. Q1: Does the 10% penalty apply if the son cash in the IRA Q2: Must the son cash in the IRA(is there a time line) or are there other options Q3: Son cannot rollover IRA , right ?
-
-
Inherited IRA
There is no 10% penalty to son on inherited IRA
IRA cannot be rolled over to sons IRA that is only for surviving spouse -
That answers question 1 and 3. For question 2, the Son has three options. Take the distribution by the end of the year in which tax is paid but no 10% penalty, or leave the funds in the decedent’s name and have the entire amount distributed to the Son within 5 years (again no 10% penalty, only tax), or leave the funds in the decedent’s name and have the IRA begin making Required Minimum Distributions over the life expectancy of the beneficiary (the son).Comment
Comment