Reversing a Non Spouse IRA distribution
I have a prospective client who’s father passed away in March. Upon gathering data from the prospect, it appears he took a $100,000 distribution from his father’s IRA which is taxable this year. I assume he did this within the past few months. The decedent had several other IRAs at various custodians totaling another $377,000. I don’t believe he understood the ability to stretch the IRA since he has inherited other non-taxable assets. Does anyone know if this decision can be reversed?
Permalink Submitted by Anonymous (not verified) on Tue, 2010-06-22 21:58
I assume this was distributed from an Inherited IRA and not in some convoluted way during the transfer process? If yes, I would have to say there is hardly a chance of getting this reversed. You would have to fight it out with the custodian, but even they are going to be in a tough compliance spot.
Maybe during the distribution (phone call) wrong information was giving about the ability to do a rollover (which you can’t) or the taxation. Only then can I see this being reviewed by management. Personally, I can not see these tranactions being “undone” with so many disclamers read or written during the distribution.
pko
Permalink Submitted by mk foss on Wed, 2010-06-23 17:08
A nonspouse beneficiary cannot do a rollover under any circumstances – that prevents them from putting it back from where it came. IRS would consider it taxable, I believe, even if the institution took it back. He will have more than met any RMD requirements for his Dad – after this experience, he should do a better job in stretching the benefits from the other IRAs.