Main Topics

A
B
C
D
E
F
G
H
I

J
K
L
M
N
O
P
Q
R

S
T
U
V
W
X
Y
Z
#

FAQs

Forms

Publications

Tax Topics

Previous Page | Table of Contents | Index | Next Page |

## Must You Withdraw or Use Assets?(p68) |

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 below under *Distributions After Owner's Death*.

taxmap/pubs/p590-019.htm#en_us_publink1000231081Minimum distributions.(p68) |

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*, below.

taxmap/pubs/p590-019.htm#en_us_publink1000231083## Recognizing Losses on Investments(p68) |

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_publink1000231084## Distributions After Owner's Death(p68) |

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_publink1000231086## Distributions to beneficiaries.(p68) |

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_publink1000231088## Waiver of required minimum distribution rules for 2009.(p68) |

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 *Waiver of required minimum distribution rules for 2009* in chapter 1.

taxmap/pubs/p590-019.htm#en_us_publink1000231090Combining with other Roth IRAs.(p68) |

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_publink1000231091Distributions that are not qualified distributions.(p68) |

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: *Ordering Rules for Distributions*, earlier in this chapter under *Are Distributions Taxable. *

taxmap/pubs/p590-019.htm#en_us_publink1000231093- The 5-year period beginning with the first taxable year for which a contribution was made to a Roth IRA set up for the owner's benefit, or
- The 5-year period starting with the year of a conversion contribution from a traditional IRA or a rollover from a qualified retirement plan to a Roth IRA,

When Ms. Hibbard died in 2009, her Roth IRA contained regular contributions of $4,000, a conversion contribution of $10,000 that was made in 2005, and earnings of $2,000. No distributions had been made from her IRA. She had no basis in the conversion contribution in 2005.

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 2009. 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_publink1000231094## Tax on excess accumulations (insufficient distributions).(p68) |

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 Page | Table of Contents | Index | Top of Page | Next Page |