The Rules of Inherited IRAs
If you inherited an individual retirement account (IRA) from someone who was not your spouse at the time of their death, the amount that you receive as a distribution from the IRA will never be subject to any early-withdrawal penalties. However, amounts you receive will be treated as ordinary income (for you) and may be subject to income tax.
There is an exception made regarding distributions when you use money from an IRA account to purchase a first-time home. However, this only applies to IRA accounts you established and contributed to yourself, not those you inherited.
For example, if your father died after age 70½ and had already started taking distributions, you would be required to take a minimum distribution from the account you inherited from him every year.
This amount is referred to as a required minimum distribution (RMD) and is calculated using your age (beginning the year after the year your father died). Your IRA custodian should be able to assist you with this calculation. If you fail to withdraw at least the minimum amount each year, you could owe the Internal Revenue Service (IRS) 50% of what the distribution should have been.