Advertising Disclosure
  1. Home
  2. Community
  3. Ask
  4. Can An Inherited Traditional IRA Be Converted To Simply A Traditional IRA?

Can An Inherited Traditional IRA Be Converted To Simply A Traditional IRA?

John Sears
  |     |   67 posts since 2015

I was shut out of the Andrews 3% IRA because they handle Roth and Traditional but not Inherited.

  Post an answer
2


Answers
alan1
  |     |   876 posts since 2015
It depends -- you have not provided sufficient information to give a"yes or no" answer. Please read IRS Publication 590. It depends on your relationship to the dead person. If the deceased owner was your spouse, you might be able to convert. It depends on whether you are the sole beneficiary and whether you have an unlimited right to withdraw funds from the inherited IRA. If the deceased was not your spouse, you can't convert.

https://www.irs.gov/pub/irs-pdf/p590b.pdf
(page 5)
Reply
2
Ally6770
  |     |   4,292 posts since 2010
Also you have to take RMD's from an inherited IRA if not a spouse. Andrews may not allow RMD withdrawals without a penalty. If this is a new inherited IRA and the deceased did not take a RMD
you have to this before the end of the year or there is a 50% penalty. 
Reply
2
John Sears
  |     |   67 posts since 2015
Thank you very much for two informative answers, it was from my late father, I have taken RMD faithfully every year.  The first year, H&R Block Bank didn't set it up properly with Dad's name and I almost got nailed for a penalty, they were a disaster.
Reply
1
RickZ
  |     |   218 posts since 2010
I have my inherited IRA in a CD at Ally Bank and they allow the yearly RMD to be taken out of the CD without penalty (though their rates have fallen recently as you know).  Also remember that RMD are just that: required minimum distributions.  You are always free to take a larger distribution or even the whole amount and then invest the distributed amount as you want.  Of course, you would then have to pay taxes on the full amount of the distribution this year, so that may not work for you.
Reply
1


The financial institution, product, and APY (Annual Percentage Yield) data displayed on this website is gathered from various sources and may not reflect all of the offers available in your region. Although we strive to provide the most accurate data possible, we cannot guarantee its accuracy. The content displayed is for general information purposes only; always verify account details and availability with the financial institution before opening an account. Contact [email protected] to report inaccurate info or to request offers be included in this website. We are not affiliated with the financial institutions included in this website.