I inherited an IRA from my elderly friend who passed away in 2011. It contained $300,000. The IRA is still in Valley National Bank. I have been taking the RMDs the past two years, once in 2011 and again in 2012. The IRA is still in her name, but shows that I am the beneficiary and that I am allowed to take the RMDs. My question is this: what options do I have with this IRA? Can I/should I roll it into a Roth IRA?  Should I do nothing, as it is earning over 3% interest, and continue to withdraw the RMDs? What do I do and what should I HAVE done?

You cannot convert these funds to a Roth IRA because you are a non-spouse beneficiary. You must continue taking RMDs each year or you can take more than that amount. You should speak to a financial advisor with regards to the investment issues.

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