Q. I recently read there is a tax advantage if a beneficiary rolls TSP death benefits into an inherited IRA. Can you provide more information on that?
A. The advantage might be continued deferral of the income tax liability that affects the contents of the account. Tax deferral, in itself, is not an advantage. Whether, or not, deferring taxation to a later date works to your advantage depends upon the tax rates in effect at the times you could have, and actually do, withdraw the money. This won’t be known until the taxes are ultimately paid.
