Retirement Savings and Benefits
Questions and comments about IRAs, 401k accounts, social security, and other forms of retirement savings and benefits.
Inherited IRA 10% Tax Penalty
Posted by: range-ball, April 19, 2017 02:02PM
My father passed away in 2007 and I was a beneficiary and received a small IRA that was in his name. At the time he was not 70 1/2. In the years since I have calculate the appropriate RMD amount based on my age and taken this annually.

My question is this - can I take the full amount of the inhertited IRA now and not be subject to the 10% penalty that would be incurred in contributory IRAs?

Re: Inherited IRA 10% Tax Penalty
Posted by: Alan S., April 19, 2017 03:57PM
Yes. There is never a 10% penalty on inherited IRA distributions. The 1099R will be coded 4, which is the code for distributions after the death of the account owner. The only penalty exposure you have is failing to take out the full amount of your RMD. You can take out more or the entire balance anytime. But you cannot change your mind and do a 60 day rollover. Once the check is distributed to you it becomes an irrevocable taxable distribution.

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