Inherit an IRA? Beware of This New IRS Trap
Retirement savers have taken full advantage of IRAs to allow their nest eggs to grow on a tax-deferred basis. However, because traditional IRAs require the accountholder to pay tax when making withdrawals and because Roth IRAs maintain their tax-free status as long as one keeps assets inside the account,, many retirees don't end up fully drawing down their retirement accounts before they pass away.
The inheritance rules for IRAs were already complicated before a new law took effect in 2019. Now, just as many people thought they were coming to grips with the new rules for inherited IRAs, the Internal Revenue Service is throwing a curveball that could have massive implications for those who've recently inherited these retirement accounts.
Image source: Getty Images.
Source Fool.com
