Inherited IRA rules?

[Fred Robertson]

Does anyone know if I can take a withdrawal from an inherited ira and within 60 days send the funds to be added to an existing IRA I already have?

[Max Gallagher]

Hi Fred - CFP here. Great question and always worth getting a second opinion.. especially when it comes to inherited IRAs. There might be some confusion around the 60-day rollover rule which allows you to move money from one IRA/401k to another (both pre-tax and Roth). This gives investors some time to complete a rollover and, in some rare cases, can be used as a source of short-term liquidity.

Unfortunately, inherited IRAs are not treated as your own and do not fall under the 60-day rule. As you mentioned, the IRS requires distributions (RMDs) so they can get their money in a timely manner. Rolling funds from an inherited IRA into a pre-tax IRA or converting to Roth is not allowed.

All that said, depending on the size of your RMDs, liquidity needs, and total income, you may consider making deductible contributions to your own IRA ($7k limit, $8k if above 50). While it doesn't directly offset the income picked up from the inherited IRA distribution on your tax return, this could partially or fully offset the tax impact and be a completely legit way to accomplish sort of a backdoor rollover.

For example.. Let's say you inherited a traditional IRA and take a $10,000 distribution this year. That $10,000 is generally taxable income. Separately, if you're eligible, you might be able to contribute $7,000 (for 2025 if under 50) to your own traditional IRA and deduct that amount from your income. While they are two separate transactions, this would essentially leave you with $3k of net taxable income. 

Remember there are income limits, contribution limits and other personal factors to consider. Consult with an expert or feel free to send me a private message to talk details.