An inherited IRA is an individual retirement account (IRA) that is passed down to a beneficiary after the death of the original account holder. The beneficiary can be a spouse, child, or any other person named as a beneficiary on the account. Inherited IRAs are also sometimes referred to as beneficiary IRAs.
The rules and regulations for inherited IRAs can be complicated, and they depend on a number of factors, including the relationship of the beneficiary to the original account holder, the age of the beneficiary, and whether the original account holder had begun taking required minimum distributions (RMDs) before their death.
In general, though, beneficiaries of inherited IRAs must take distributions from the account, with the amount and timing of those distributions determined by a set of IRS rules. The rules for inherited IRAs are different from those for traditional and Roth IRAs, so it’s important for beneficiaries to understand the specific requirements that apply to their situation.
