Roth IRA RMDs Flashcards
1
Q
Are Roth IRAs subject to RMDs?
A
No, not to original account owners.
However, inherited Roth IRAs are subject to (tax free) RMDs.
2
Q
Under what circumstances are Roth IRAs subject to RMDs?
A
Inherited IRAs are subject to RMDs
3
Q
Why does the federal government require RMDs from Inherited Roth IRAs?
A
To prevent inter-generational super accumulations of tax-free money. While the RMDs from inherited Roth IRA’s do not generate immediate tax revenue, once the money is out, it may be invested in taxable investments which can generate taxable gains, interest, and dividends, or be spent on goods and services, generating taxable income to the government from businesses that provide the good or service.
