Inherited IRA.

Kiplinger's Retirement Report, March, 2006

INHERITED IRA

I inherited my mother's IRA five years ago when she died. My understanding is that I cannot roll this into my IRA, but that I have to withdraw all of the money this year--the fifth year after her death--and pay taxes on the whole amount. Are there alternatives?

Yes, says IRA expert Ed Slott (www.irahelp.com). Although you cannot roll your mother's inherited IRA into your IRA--only a surviving spouse can do that--you have other options. By being named as a beneficiary of your mother's IRA, you can take distributions over your lifetime.

Because you are eligible for this "stretch" IRA, you really should have started taking annual withdrawals beginning the year after your mother's death. The IRS could assess a 50% penalty on the...

Read the rest of this article with a Free Trial at HighBeam Research.

Premium Content Partnership | HighBeam Research provides an in-depth online archive library of reference works.