Minor Inherited IRA with Loan
I have a client that passed away in 2007. His children (one of legal age / one a minor) are the bene’s on his company 401k. He also had a loan outstanding. How will this affect if we try to rollover the assets to an inherited IRA ? Will this make it a taxable distribution and any implications ?
Thanks
Permalink Submitted by Denise Appleby on Tue, 2008-01-01 16:13
The loan cannot- and should not- be rolled over to the IRA.
The loan should be treated as a distribution to the decedent , and the children can rollover the remaining balance to their IRAs.