There still is no clear authority for doing this, even though the statement that it can’t be done seems to have disappeared from Pub 590. This means a spousal IRA beneficiary cannot do something that a non spousal qualified plan beneficiary can do, ie. convert to an inherited Roth IRA. A spousal beneficiary of a TIRA can also do a rollover, but apparently only to their own TIRA or Roth IRA, but NOT to an inherited Roth IRA. And a spousal beneficiary of a Roth IRA also has the option to maintain the Roth as inherited rather than assuming ownership unless the IRA agreement makes ownership automatic.

Therefore, the option you inquired about still appears to be the odd man out. Perhaps the next round of portability improvements will allow it. Meanwhile, the client does not have to take RMDs from the inherited TIRA until the year her husband would have reached 70.5. She might convert some of it to an owned Roth IRA, with the idea of not tapping that until the 5 year conversion holding period is complete. Meanwhile she could take penalty free distributions from the remainder of the inherited TIRA. After 5 years she could take tax and penalty free distributions from the earlier Roth conversion IRA if she needed to. The inherited TIRA can be continued indefinitely, or after 5 years she could also convert it to an owned Roth IRA and then take penalty free distributions from the earlier conversion that has now met the 5 year holding period.

How much to convert in this situation is a planning challenge since she apparently has a long way to go to reach 59.5.

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