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April 11, 2025
Question

Royalty Trust in Roth IRA - How to handle dividends

  • April 11, 2025
  • 1 reply
  • 0 views

I understand that a "Royalty Trust" is a passthrough entity and that the income generated is "passed through" to the IRA.  Does that mean the annual dividends from a Royalty Trust held in a Roth IRA are immediately taxable in the year they are received?  If so, how would that be handled in your annual tax returns?

    1 reply

    April 24, 2025

    No, they are not taxed if the trust is held inside the IRA.  Earnings are not taxable inside a ROTH IRA.

     

    @WorthingtonOH 

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