Distribution Rules and Examples An inherited IRA is a retirement plan that a beneficiary inherits after the previous owner's death, and is typically a liquidating an inherited ira member or spouse of the original account holder. Anne Sraders Sep 26, 2018 8.34 PM EDT When it comes to retirement, there are a lot of options out there - from a traditional 401 k to a 403 b and everything in between. And how can you get the most out of yours? What is an Inherited Liquidating an inherited ira
beneficiary taxationInvestors should understand what they can and cannot do before making a move they will regret. You need to make any required withdrawals before Dec. Jamie Grill Getty Images Someone close to you has died and left you money from an individual retirement account. Planning for this should be easy, right? The rules for inherited IRAs are complicated.
avoid taxes on inherited ira
By Julie Garber Updated January 07, 2019 You have several options for what you can do with an inherited IRA if you aren't the spouse of the account owner. Unfortunately, many IRA beneficiaries aren't aware of all their options, so they immediately cash out the IRA and end up with a huge income tax bill. But income taxes can be minimized by simply choosing the option that results in the smallest tax hit. You might have up to four choices. You won't be allowed to roll over the inherited IRA into your own IRA, but you can take distributions from the inherited IRA without paying the 10 percent penalty for early withdrawals.
Opinions expressed by Forbes Contributors are their own. Here are a few mistakes you want to avoid if you inherit an IRA or other retirement accounts from a loved one.
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