My mother passed 12/2018 at 70yrs 10 months and 28 days(so over the 70 1/2 threasholdas I understand it).
She had a 401K that I was the beneficiary of.
She had NOT started any distributions. The company contacted me and I rolled it into a 401K in my name, there is no mention of "inherited" anywhere on the paperwork I have.
They sent me a form to start RMDs, but I was under the impression that I did not have to take the money. Then I read the quoted post below and now I don't know what is correct.
I am 50 years old.
First, do I need to take RMDs or a lump sum within 5 years?
What are the tax implications?
Mr. Knowitall responded like this to an IRA question, is this relevant to my situation? :
" You do not pay income taxes when you inherit a traditional IRA, but will pay income taxes when money is disbursed to you from the IRA.
If you inherit a traditional IRA and you are under the age of 70-1/2, you have three options:
1. Cash out the IRA, and pay income tax on the money.
2. Place the IRA into a new inherited IRA account and make the five-year election, then withdraw the funds over the five year period, paying taxes on the money that you withdraw.
3. Roll the IRA over into your own IRA (a new IRA or existing IRA) and then, when you ultimately take distributions, pay income taxes on those distributions.
As the IRA is funded with pre-tax dollars, you will pay taxes on the money when it is disbursed, but you can choose the option that best serves your needs."