Inherited IRAs are treated the same, whether they are traditional IRAs orRoth IRAs. The tax treatment of withdrawals does vary—consistent with the type of IRA (funded with pre-tax dollars, like the traditional type, or post-tax dollars, like with the Roth). Inherited IRAs: Rules for Spouse...
The IRS providesfurther rules around your options, including what you can do with aRoth IRA, where the rules differ substantially from traditional IRAs. 2. Choose when to take your money If you’ve inherited an IRA, you’ll need to take action to avoid running afoul of IRS rules. ...
Like retirees, heirs generally face a penalty for missing an RMD or not withdrawing enough. The penalty is 25% of the amount that should have been withdrawn or 10% if the RMD is corrected within two years. Amid confusion, the IRSwaived the penalty in 2022for missed RMDs for some inheri...