Inherited IRA Rollover

An inherited IRA rollover works like any other IRA rollover. A beneficiary of an inherited IRA can choose to rollover his or her inherited IRA immediately or at a later date. There are a few points to consider when deciding whether to rollover inherited IRA account.

Inherited IRA rules for IRA rollover

First of all, if you inherited a traditional IRA, then you can rollover your inherited IRA into a traditional IRA. Similarly, if you inherited a Roth IRA, you can rollover your inherited IRA into a Roth IRA. These are tax free rollovers. However, if your inherited IRA is a traditional IRA, to rollover a traditional IRA into a Roth IRA is a taxable event. An inherited IRA rollover is always a tax free event if done properly.

How to do inherited IRA rollover

To rollover an inherited IRA, you need to contact a financial institution where your new IRA will be kept. The new financial institution will act as your custodian for your new inherited IRA rollover account. Most financial institutions will not give advice on taxes so you need to consult your tax attorney should you have specific questions about inherited IRA rollover and the Inherited IRA tax basis.