Rollover of Lump Sum Distribution from Deceased’s IRA

Submitted by Michael Eischen on Thu, 2008-06-26 20:38

If a lump sum distribution (with no tax withheld) has been taken from a deceased’s IRA, can the spouse beneficiary roll that distribution into an IRA in their name within 60 days of the distribution?



Submitted by Alan Spross on Thu, 2008-06-26 21:12

Yes.



Submitted by Michael Eischen on Fri, 2008-06-27 12:16

Thank you Alan.



Submitted by Stephen Olafson on Mon, 2016-05-02 20:30

Based on the OP’s question, what if the surviving spouse receives multiple lump sum distributions from the decedent’s IRA and deposits the funds into her own IRA, would that violate the new one-per-year 60-day rollover rule?  Would these even be categorized as 60-day rollovers since the distributions are from the decedent’s IRA and not the surviving spouse’s?



Submitted by Alan - IRA critic on Tue, 2016-05-03 01:11

  • These should be done by direct transfer. Although the IRS has not  released specific guidance on the effect of spousal  rollovers from a beneficiary IRA account, the beneficiary is the beneficial owner of that IRA and therefore I would not depend on the IRS to consider it a separate distribution source since only the beneficiary can take distributions. Note that this  situation was always a question since such distributions came from a single IRA account and were restricted to one even before the recent IRS ruling that further restricted rollovers to one for ALL IRA accounts.
  • It should also be noted that if any of these distributions were considered completion of the decedent’s final RMD, those would not be eligible for rollover.


Submitted by David Mertz on Tue, 2016-05-03 04:20

Section 408(d)(3)(B) seems pretty clear that the individual who receives a distribution from an IRA is only permitted to roll over one distribution in a 12-month period.  In this case it’s the surviving spouse who receives the distribution.  Nothing in section 408(d)(3)(B) exempts the surviving spouse from this limitation.



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