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previous page Previous Page: Publication 590 - Individual Retirement Arrangements (IRAs) - Are Distributions Taxable?
next page Next Page: Publication 590 - Individual Retirement Arrangements (IRAs) - Savings Incentive Match Plans for Employees (SIMPLE)
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication
taxmap/pubs/p590-019.htm#en_us_publink10006537

Must You Withdraw or Use Assets?(p70)


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You are not required to take distributions from your Roth IRA at any age. The minimum distribution rules that apply to traditional IRAs do not apply to Roth IRAs while the owner is alive. However, after the death of a Roth IRA owner, certain of the minimum distribution rules that apply to traditional IRAs also apply to Roth IRAs as explained later under Distributions After Owner's Death.
taxmap/pubs/p590-019.htm#en_us_publink10006538

Minimum distributions.(p70)
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You cannot use your Roth IRA to satisfy minimum distribution requirements for your traditional IRA. Nor can you use distributions from traditional IRAs for required distributions from Roth IRAs. See Distributions to beneficiaries, later.
taxmap/pubs/p590-019.htm#en_us_publink10006539

Recognizing Losses on Investments(p70)


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Recognizing Losses on Investments

If you have a loss on your Roth IRA investment, you can recognize the loss on your income tax return, but only when all the amounts in all of your Roth IRA accounts have been distributed to you and the total distributions are less than your unrecovered basis.
Your basis is the total amount of contributions in your Roth IRAs.
You claim the loss as a miscellaneous itemized deduction, subject to the 2%-of-adjusted-gross-income limit that applies to certain miscellaneous itemized deductions on Schedule A, Form 1040. Any such losses are added back to taxable income for purposes of calculating the alternative minimum tax.
taxmap/pubs/p590-019.htm#en_us_publink10006540

Distributions After Owner's Death(p70)


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Distributions After Owner's Death

If a Roth IRA owner dies, the minimum distribution rules that apply to traditional IRAs apply to Roth IRAs as though the Roth IRA owner died before his or her required beginning date. See When Can You Withdraw or Use Assets? in chapter 1.
taxmap/pubs/p590-019.htm#en_us_publink10006541

Distributions to beneficiaries.(p70)


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Generally, the entire interest in the Roth IRA must be distributed by the end of the fifth calendar year after the year of the owner's death unless the interest is payable to a designated beneficiary over the life or life expectancy of the designated beneficiary. (See When Must You Withdraw Assets? (Required Minimum Distributions) in chapter 1.) If you are a beneficiary receiving distributions over a 5-year period, you can waive the distribution for 2009, effectively taking distributions over a 6-year rather than a 5-year period.
If paid as an annuity, the entire interest must be payable over a period not greater than the designated beneficiary's life expectancy and distributions must begin before the end of the calendar year following the year of death. Distributions from another Roth IRA cannot be substituted for these distributions unless the other Roth IRA was inherited from the same decedent.
If the sole beneficiary is the spouse, he or she can either delay distributions until the decedent would have reached age 701/2 or treat the Roth IRA as his or her own.
taxmap/pubs/p590-019.htm#en_us_publink1000133017

Temporary waiver of required minimum distribution rules for 2009.(p71)


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No minimum distributions are required for 2009. The waiver applies to post-death minimum distributions required for Roth IRA beneficiaries in the same way it applies to traditional IRA beneficiaries. See Temporary waiver of required minimum distribution rules for 2009 in chapter 1.
taxmap/pubs/p590-019.htm#en_us_publink10006542

Combining with other Roth IRAs.(p71)
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A beneficiary can combine an inherited Roth IRA with another Roth IRA maintained by the beneficiary only if the beneficiary either:
taxmap/pubs/p590-019.htm#en_us_publink10006543

Distributions that are not qualified distributions.(p71)
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If a distribution to a beneficiary is not a qualified distribution, it is generally includible in the beneficiary's gross income in the same manner as it would have been included in the owner's income had it been distributed to the IRA owner when he or she was alive.
If the owner of a Roth IRA dies before the end of: each type of contribution is divided among multiple beneficiaries according to the pro-rata share of each. See Ordering Rules for Distributions, earlier in this chapter under Are Distributions Taxable.
taxmap/pubs/p590-019.htm#en_us_publink10006544

Example.(p71)

When Ms. Hibbard died in 2008, her Roth IRA contained regular contributions of $4,000, a conversion contribution of $10,000 that was made in 2004, and earnings of $2,000. No distributions had been made from her IRA. She had no basis in the conversion contribution in 2004.
When she established her Roth IRA, she named each of her 4 children as equal beneficiaries. Each child will receive one-fourth of each type of contribution and one-fourth of the earnings. An immediate distribution of $4,000 to each child will be treated as $1,000 from regular contributions, $2,500 from conversion contributions, and $500 from earnings.
In this case, because the distributions are made before the end of the applicable 5-year period for a qualified distribution, each beneficiary includes $500 in income for 2008. The 10% additional tax on early distributions does not apply because the distribution was made to the beneficiaries as a result of the death of the IRA owner.
taxmap/pubs/p590-019.htm#en_us_publink10006545

Tax on excess accumulations (insufficient distributions).(p71)


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If distributions from an inherited Roth IRA are less than the required minimum distribution for the year, discussed in chapter 1 under When Must You Withdraw Assets? (Required Minimum Distributions), you may have to pay a 50% excise tax for that year on the amount not distributed as required. For the tax on excess accumulations (insufficient distributions), see Excess Accumulations (Insufficient Distributions) under What Acts Result in Penalties or Additional Taxes? in chapter 1. If this applies to you, substitute "Roth IRA" for "traditional IRA" in that discussion.
previous pagePrevious Page: Publication 590 - Individual Retirement Arrangements (IRAs) - Are Distributions Taxable?
next pageNext Page: Publication 590 - Individual Retirement Arrangements (IRAs) - Savings Incentive Match Plans for Employees (SIMPLE)
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication