INHERITED ROTH IRA RMDS AND

MERGING IRAS: TODAY’S SLOTT

REPORT MAILBAG
Thursday, May 11, 2023
By Ian Berger, JD
IRA Analyst
Follow Us on Twitter: @theslottreport

Question:

Hello,

Are you required to take out RMDs (required minimum distributions) on an inherited
Roth IRA? The original owner was 82 when he passed away. The funds were left to his
nephew, so I understand the 10-year rule will apply.

Thanks for your help,

David

Answer:

Hi David,

You are correct that the IRA owner’s nephew is subject to the 10-year payment rule.
The IRS says that beneficiaries subject to the 10-year rule also must take annual RMDs
in years 1-9 of the 10-year period if the original owner died on or after his required
beginning date (RBD) for RMDs. Roth IRA owners are always considered to have died
before their RBD. So, non-eligible designated beneficiaries of Roth IRA owners (those
subject to the 10-year rule) are never subject to annual RMDs – no matter what age the
owner died.

Question:

I have one large traditional IRA and one very small traditional IRA. Both were funded
entirely with tax-deductible dollars. Both are at Vanguard. I would like to "merge" the
small IRA into the large IRA to simplify my accounts. Is it possible to do this? How
should I go about it?

Thank you.

Jane

Answer:

Hi Jane,

There is no problem with merging IRAs of the same type, such as traditional IRAs with
other traditional IRAs, or Roth IRAs with other Roth IRAs. (You cannot combine your
own “lifetime” IRAs with inherited IRAs.) This consolidation will make it easier for you to
keep track of your account and to calculate RMDs when they become due. Simply
contact Vanguard, and they will let you know how to go about it.