Brokerage capable of linking cash and inherited IRA accounts? (IB can't)

[Robert Morse]

Is there a benefit to maintaining an inherited IRA as a separate entity? Is there a penalty for just transferring the inherited balance into one's personal IRA??

To my knowledge, you can roll. You can liquidate and pay the tax or take out the required amount each year as required.

 

[Scataphagos]

To my knowledge, you can roll. You can liquidate and pay the tax or take out the required amount each year as required.

I guess it would depend upon the age of the beneficiary. If you inherited and wanted to take some out... isn't there's a required distribution schedule?. I suppose you could take that amount without paying premature distribution tax if under 59 1/2. (If beneficiary took out more than the "scheduled" amount, would 10% premature distribution tax apply to the amount above the required amount?) If beneficiary is >59 1/2, doesn't seem to be any benefit to keep the account separate.

 

[elt894]

Is there a benefit to maintaining an inherited IRA as a separate entity? Is there a penalty for just transferring the inherited balance into one's personal IRA??

Only a spouse's IRA can be rolled into a personal IRA. For non-spousal inherited IRAs the timing of distributions is very different from a regular IRA. You have to start taking distributions after the first year, spread out over your expected lifespan.

 

[jkoak]

I guess it would depend upon the age of the beneficiary. If you inherited and wanted to take some out... there's a distribution schedule. I suppose you could take that amount without paying premature distribution tax if under 59 1/2. (If beneficiary took out more than the "scheduled" amount, would 10% premature distribution apply?) If beneficiary is >59 1/2, doesn't seem to be any benefit to keep the account separate.

It's a non-spousal inherited IRA, so it can't be rolled into one's own. But it can be stretched for the lifetime of the beneficiary, with RMDs commencing immediately.

 

[Scataphagos]

Only a spouse's IRA can be rolled into a personal IRA. For non-spousal inherited IRAs the timing of distributions is very different from a regular IRA. You have to start taking distributions after the first year, spread out over your expected lifespan.

OK.. that makes sense.