Inheriting an IRA

A Fidelity Transition Services specialist can help guide you through the process—call us at 800-544-0003. For more information on distributions required for these scenarios, see the rules for required distributions.

If you've inherited an IRA that was held at another financial services provider, you'll need to complete the inheritance process with that provider. Once you've taken ownership of the assets, you could then transfer the assets to Fidelity if you wish.

This transfer process depends on the type of plan you're inheriting. Our inheritance specialists are ready to help guide you along the way. Begin by giving us a call at 800-835-5095. Learn more about what happens if you inherit a 401(k).

Receiving inherited assets generally has no immediate income tax impact; however, required minimum distributions (RMDs) are taxed as ordinary income for the inheritor in the year they are withdrawn.

For inherited Roth IRAs, the inherited assets generally have no immediate income tax impact and the withdrawals are tax-free as long as the original owner met the 5-year aging requirement.

Generally distributions need to start within a year of inheriting the assets. Required minimum distributions (RMDs) vary by a number of factors, including your relationship to the deceased. Any RMDs due for the original owner must be taken by their deadline to avoid penalties. It is your responsibility to be familiar with the RMD rules that apply to your specific situation. See the rules for required distributions.

IRS Pubication 590-B explains the rules for handling an inherited IRA.