Hello, this is Noel Dalmacio, your ultimate CPA at lowermytaxnow
Did you have a parent, relative or sibling that passed away and they transferred their IRA account to you?
If you inherited an Individual Retirement Account, IRA for short, from someone other than your spouse, you may be surprised to learn you have to take annual distributions.
That’s generally the case whether the IRA is a traditional or a Roth account.
The problem sometimes is the brokerage company does not know the tax rules for inherited IRA.
And if you fail to take the distributions as required, you may owe a 50% penalty of the amount you should have taken.
Therefore, to avoid the penalties, make sure you take out timely distributions from the inherited IRAs.
Until then, this is Noel Dalmacio, your ultimate CPA at lowermytaxnow