Ask the Hammer: Can I Convert an Inherited IRA into an Inherited Roth IRA?

Robert Powell, CFP®

If you inherit an IRA can you convert it into an inherited Roth IRA?

That's the question Jeffrey Levine, director of advanced planning at Buckingham Wealth Partners, tackled in this episode of Ask the Hammer.

And, unfortunately, the answer to that question is no, says Levine.

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Jeffrey Levine, CPA/PFS

"You cannot convert an inherited traditional IRA to an inherited Roth IRA," he says. "That is not allowed in any circumstances, no inherited IRA to inherited Roth IRA.

You can, however, inherit a 401(k) or 403(b) and convert that into an inherited Roth IRA. This feature of 401(k) and 403(b) could be one of several reasons why you might leave your 401(k) with your former employer. But doing so for that reason alone would require a good deal of foresight, says Levine.

Among other things, he says you would have to weigh your desire to give your children the ability to convert to an inherited Roth IRA from your plan against your desire to do qualified charitable distributions or QCDs during your lifetime. Well, you can't do a QCD from a 401(k), says Levine.

Ultimately, you have to put all these factors on a scale and determine what's most important, says Levine. "And you go from there and you make the best of it because these are the rules we have."

Got Questions?

Email askthehammer@buckinghamgroup.com.

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