Inherited Roth treated as beneficiary IRA versus spouses IRA
Husband dies leaving Roth IRA to spouse. This account is retitled as a “conduit IRA” – what I call a “beneficiary IRA”. Death in 2007. Spouse does not take an RMD for year 2008. It seems to me that an RMD is required. It seems to me that the spouse did not elect to treat this Roth IRA as her own. Is there an RMD for year 2008?
I recommend that the IRA be retitled in the name of the spouse. Is it important to do this before 1/1/2010 in order to avoid an RMD based on the 12/31/09 balance?
Thanks
Jim
Permalink Submitted by JAMES MAGNO on Fri, 2009-12-18 17:43
In perusual of Natalie Choate’s [i]Life and Death Planning[/i], it appears that no RMD penalty is due. Even though account is titled as beneficiary account, it is deemed to have been subject to election to be treated as spouse’s own IRA if spouse fails to take RMD – per reg 1.408-8 A-5(b)(1).
There is no RMD requirement for year 2008 and there is no urgency (with respect to future RMDs) to formally retitle the account from beneficiary account to spouse’s name.
Pretty cool
Jim Magno