Bank sent IRA to NY State client received 1099R
I have a client who’s sister was declared incompetent and he now has power of attorney for her…prior to this a bank was sending her RMD letters and she never reponded and finally the bank turned her IRA over to NY State as unclaimed property and issued a 1099R to her for $98,000…now the IRS is looking to get the taxes from her….My client claimed the money on her behalf and is waiting for NY State to release it…when he receives the money can he do a roll over IRA for his sister??? Incidently the same bank also had savings accounts and cd’s that were not turned over to NY State…they do not know why this did not happen
Thanks
Bob
Permalink Submitted by Bruce Steiner on Mon, 2010-01-11 23:24
Section 402(c)(3)(B), effective 1/1/2002, gives the IRS discretion to waive the 60-day deadline for rolling over IRA distributions “where the failure to waive such requirement would be against equity or good conscience, including casualty, disaster, or other events beyond the reasonable control of the individual ….”
The IRS has issued numerous waivers (and has denied many as well). I have obtained waivers in about a half dozen cases. You may wish to discuss this with tax/estates counsel, who can give you more specific advice as to whether it may make sense to request a waiver in this case.
Bruce Steiner, attorney
NYC
also admitted in NJ and FL
Permalink Submitted by Alan Spross on Tue, 2010-01-12 00:19
Bruce,
Why the distribution and 1099R? Because NYS is not an approved IRA custodian?
Permalink Submitted by Bruce Steiner on Tue, 2010-01-12 20:32
That’s one way to look at it. The bank did pay the money out of the IRA.