Lawyer EXPLAINS: What to do if you have an Inherited IRA

[@pklemets]

What's the taxable impacts of a crypto IRA distribution?

[@DaveBrondyke]

If my daughter inherits my roth and has to drain it by end of year 10 where can they distribute it to?

[@alrocky]

She can spend it, contribute $7,000 to Roth IRA, contribute $23,000 to traditional/Roth 401(k).

[@papasquat355]

@@alrocky Don't ever use tax free money and put it into a taxable account like a traditional IRA or 401k. Why take tax free money and make it taxable?
Put it into a brokerage and keep your taxable income under the limits to pay 0% capital gains.

[@alrocky]

@@papasquat355 The daughter in question would not be actually placing the inherited tax free money in traditional 401(k) but it would offset/replace her income used to fund that t-401(k). A t-401(k) would be preferable if she's in a high tax bracket. (Note no mention of t-IRA). She generally should max out Roth IRA and 401(k) before using taxable brokerage account and while a Roth 401(k) perhaps likely better a t-401(k) might be okay.

[@papasquat355]

@@alrocky If she's a high tax bracket earner the roth may not even be an option. Putting the tax free funds into a brokerage is a MUCH better tax play. Capital gains rates are 0%, 15% and 20% depending on taxable income. That is a much better play than using tax free money towards a tax deferred account that will face whatever tax rates we will be facing in retirement.

[@alrocky]

@@papasquat355 *_Backdoor_* Roth IRA is an option.