Capitalchoice132 writes

A woman has received a check from an IRA she inherited 2 yrs. from her husband. She said her husband’s former employer said she had to move it because her deceased husband would have been 70 1/2 this year. She has only had this check a week but it is in her name. What can she do with this check? Can she deposit it to her checking account & then write a check to the investment company without any taxable event?

Peter’s response

I assume that the woman never retitled the IRA as her own and that it is currently titled something like “deceased spouse’s IRA fbo surviving spouse.”

Since the decedent died before his required beginning date, distributions to the surviving spouse do not need to begin until the year in which the owner would have reached 70.5. See Pub 590, p. 36.

It sounds like the IRA custodian determined the required distribution for 2011 and mailed the surviving spouse a check for that amount.

If my suppositions are correct and the amount of the required distribution was determined correctly, the check is taxable income for 2011 and cannot be deposited or rolled over to another IRA.

My recommendation is to talk to the former employer to ascertain what is going on. The IRA may not be an IRA, for example, and the distribution might represent the full value of the decedent’s account because the employer plan requires full distribution in the year the decedent would have turned 70.5.