J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return

8.24 Distributions to Roth IRA Beneficiaries

If you are the surviving spouse of the Roth IRA owner and you are the owner’s sole Roth IRA beneficiary, you may elect to treat the inherited account as your own Roth IRA. If you treat the account as your own, you do not have to take distributions from the account at any time, since a Roth IRA owner is not subject to minimum distribution requirements. If you take some distributions, you are not locked into a specific distribution schedule unless you agree to that schedule.

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Caution

Some Distributions Partly Taxable to Beneficiary

Tax treatment of a distribution you receive as the beneficiary of a Roth IRA depends on whether it would have been a qualified distribution had the owner been alive to receive it on the distribution date. If you receive the distribution before the end of the owner’s five-year holding period (8.23), and part of the distribution is allocable to earnings under the ordering rules (8.23), you must include that amount in your taxable income. However, even if you receive a taxable distribution and are under age 59½, you are not subject to the 10% early distribution penalty.

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Surviving spouses who do not elect to treat an inherited Roth IRA as their own, and beneficiaries other than surviving spouses, must receive required minimum distributions (RMDs). If there is an individual ...