Can You Roll Over an Inherited IRA From a Parent?

You cannot roll over an IRA inherited from a parent into your own IRA. Federal law reserves that option for surviving spouses. As a child, you have to keep the money in a separately titled inherited IRA and withdraw the full balance under a fixed timetable, usually within ten years. Depositing the funds into your personal IRA is treated as a full taxable distribution with no way to undo it.¹

Why the Spousal Rollover Rule Does Not Apply to You

Section 408(d)(3)(C) of the Internal Revenue Code strips rollover treatment from any IRA acquired because of someone’s death when the beneficiary is not the surviving spouse. A spouse can move inherited funds into their own IRA and treat them as if they had always owned the account. A child cannot.¹

The consequences of getting this wrong are severe. If you deposit inherited IRA money into your own personal IRA, the IRS treats the entire amount as a taxable distribution in the year received. There is no 60-day grace period. On a $500,000 inherited balance, that single mistake can produce a six-figure federal tax bill. The only safe container for the money is an account structured and titled as an inherited IRA.

Opening the Inherited IRA

An inherited IRA (sometimes called a beneficiary IRA) has to stay in the name of the deceased owner, held for your benefit. The title typically reads something like “Jane Smith, deceased, for the benefit of John Smith, beneficiary.”² That format lets the IRS track the source of the funds and identify who owes tax on future withdrawals.

To open the account, the custodian will usually ask for a certified copy of the death certificate, your parent’s Social Security number, and the original IRA account number. Certified death certificates cost roughly $5 to $34 depending on the state, and you may need several copies if your parent’s assets are spread across multiple institutions.

One useful piece of news: distributions from an inherited IRA are exempt from the 10% early-withdrawal penalty regardless of your age. The tax code specifically excludes distributions made to a beneficiary on account of the owner’s death.³ Income tax still applies to traditional-IRA withdrawals, but the age-based penalty does not.

Moving the Money Without Triggering Tax

The safest way to transfer the assets is a trustee-to-trustee transfer, where the new custodian coordinates directly with the firm holding your parent’s IRA. The money moves institution to institution and never touches you. The IRS treats a direct transfer differently from a rollover, and the one-rollover-per-year limit does not apply.⁴

If a physical check is involved, it has to be made payable to the receiving institution for the benefit of the inherited IRA. A check written to you personally is a distribution, and unlike a spouse you have no 60-day window to fix it. The tax-deferred status is gone permanently once the funds land in your hands. Keep confirmations from both custodians as proof the money never entered your possession.

The 10-Year Deadline

The SECURE Act of 2019 ended the old “stretch IRA” for most non-spouse beneficiaries. If you inherited from a parent after 2019 and you are an adult child, the account must be fully emptied by December 31 of the tenth year after your parent’s death.⁵ Inherit in 2026, and the balance has to be zero by December 31, 2036.

Do You Have to Take Withdrawals Every Year?

Whether you owe annual required minimum distributions during the ten-year window depends on one fact: whether your parent had reached their required beginning date (RBD) before dying. The RBD for a traditional IRA is currently April 1 of the year after the owner turns 73.⁶ Under IRS final regulations issued in July 2024, your obligations split into two paths.

If your parent died before reaching their RBD age, you are not required to take anything in years one through nine. You can withdraw nothing, a little, or a lot, so long as the account is empty by the end of year ten. That flexibility lets you time withdrawals for years when your income is lower.

If your parent died on or after their RBD age, you must take an annual RMD in each of years one through nine, calculated from IRS life expectancy tables, and still empty the account by the end of year ten. The annual RMD requirement took full effect in 2025. Beneficiaries who inherited between 2020 and 2024 and skipped annual withdrawals during the IRS transition period should check with a tax professional to confirm what they owe going forward.

Beneficiaries Who Get More Time

Not every non-spouse beneficiary is on the 10-year clock. Federal law recognizes a category called eligible designated beneficiaries, who can still take distributions over their own life expectancy:⁷

A minor child of the decedent, until age 21. At 21, the child’s own 10-year clock starts, giving them until age 31 to drain the account. This applies only to children of the decedent, not grandchildren or other young relatives.
A beneficiary who meets the federal definition of disability under Section 72(m)(7).
A beneficiary with a certification of indefinite chronic illness under Section 7702B(c)(2).
A beneficiary who is not more than ten years younger than the original account owner.

For an adult child who is fully able-bodied and more than ten years younger than the parent, none of these apply. The 10-year rule governs.

How the Withdrawals Are Taxed

Traditional Inherited IRA

Distributions from an inherited traditional IRA are taxed as ordinary income in the year you receive them. No capital gains rate, no special treatment.² If your parent made only deductible contributions, every dollar is fully taxable.

If your parent made nondeductible (after-tax) contributions, part of each distribution is a tax-free return of that basis. You will need Form 8606 to calculate the taxable and nontaxable portions.⁸ Tracking that basis is on you, so ask the executor or the original custodian whether any nondeductible contributions were made. Missing it means paying tax on money your parent already paid tax on.

Roth Inherited IRA

An inherited Roth IRA follows the same 10-year distribution timeline. The tax treatment is what changes. Your parent’s contributions come out tax-free, and earnings are tax-free as long as the Roth was open at least five years before your parent’s death.⁵ The five-year clock runs from January 1 of the tax year your parent made their first Roth contribution, not from the date you inherited.

If your parent opened the Roth less than five years before dying, contribution withdrawals are still tax-free but any earnings you pull out are taxed as ordinary income. In most cases where a parent contributed for decades, the five-year test is already met and the whole balance comes out tax-free.

Splitting the Account Among Siblings

When a parent names more than one child as beneficiary, the IRA can be divided into separate inherited IRAs, one for each sibling. This has to happen by December 31 of the year following the year of death. If separate accounts are not established by that deadline, distributions for every beneficiary are calculated using the oldest sibling’s life expectancy, which penalizes the younger ones.

The mechanics are simple. Each sibling opens their own inherited IRA, and the custodian divides the assets according to the percentages on the beneficiary form. Three children named equally each receive a separate inherited IRA holding one-third of the balance, and each one manages distributions and tax reporting independently after that. The deadline is firm. Start early.

What Missing a Required Distribution Costs

The penalty for failing to take a required distribution on time is an excise tax equal to 25% of the amount you should have withdrawn. Correcting the shortfall within two years drops the penalty to 10%.⁶ You report the shortfall and the excise tax on Form 5329 with your federal return for the year the distribution was due.

The worst version of this mistake is missing the 10-year deadline entirely. On a $400,000 inherited balance still sitting in the account at the end of year ten, the excise tax alone would be $100,000, on top of the ordinary income tax owed when the money finally comes out. Calendar reminders and an annual call with your custodian are cheap protection.

1
Office of the Law Revision Counsel. 26 USC 408(d) – Tax Treatment of Distributions
2
Internal Revenue Service. Publication 590-B (2025), Distributions from Individual Retirement Arrangements (IRAs)
3
Internal Revenue Service. Topic No. 557, Additional Tax on Early Distributions from Traditional and Roth IRAs
4
Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions
5
Internal Revenue Service. Retirement Topics – Beneficiary
6
Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
7
Cornell Law Institute. 26 USC 401(a)(9) – Required Distributions
8
IRS.gov. 2025 Instructions for Form 8606 – Nondeductible IRAs