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Q&A: Inherited IRA taxes

August 8, 2022 By Liz Weston

Dear Liz: I have about $16,000 in a Roth IRA that I plan to leave to my daughter. When she collects this on my death, does she pay tax on the withdrawals?

Answer: No. She would have to pay taxes on withdrawals if the money were in a regular inherited IRA, but not if the money is in a Roth. She will be required to withdraw the money within 10 years, though. Congress eliminated the so-called “stretch IRA” for most inheritors, so non-spouse beneficiaries can no longer stretch withdrawals over their own lifetimes.

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Filed Under: Estate Planning, Q&A, Retirement Savings, Taxes Tagged With: Inheritance, q&a, Taxes

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