Rollover for a spouse/beneficiary who is not a U.S. Citizen
The IRA owner is a US citizen however his spouse/beneficiary is not. They are both US residence. Both are over age 70.5
For a spouse/beneficiary who is not a U.S. citizen, how does one do an IRA rollover and still qualify under the QDOT rules?
Permalink Submitted by Bruce Steiner on Mon, 2008-02-11 23:07
The final QDOT regulations (which were issued in 1995) say that the IRS is supposed to issue guidance on this. But the IRS hasn’t issued any guidance on it yet. In the meantime, if you want certainty, you can apply for a ruling, or if not then just follow the regulations as best as you can. In general, a portion of each IRA distribution can be considered income and a portion can be considered principal, and the spouse has to agree that he/she will contribute the principal portion of each distribution to a QDOT. The QDOT can reimburse the spouse for the income taxes the spouse has to pay on the principal portion of the IRA distributions. See the regulations for more details. The IRS also issued a couple of rulings on this in the mid to late 1990s, which the surviving spouse’s lawyer might also want to take a look at.
Bruce Steiner, attorney
NYC
also admitted in NJ and FL