60 Day Rule for Nonspouse Inherited IRA
I have a client whom lost their mother recently and is due to inherit her IRA. The mother in an attempt to avoid estate taxes gifted monies from her IRA 3 weeks ago. The daughter is also the excutor for the estate and would like to put the money back into the IRA to avoid the income tax. Can the daughter put the money back into the mother’s IRA or her own beneficiary IRA under the 60 day rule? TKS!
Permalink Submitted by Alan Spross on Fri, 2012-06-08 16:51
Basically, not for the benefit of a non spouse beneficiary.
In 2005 there were 3 letter rulings allowing a non spouse beneficiary/executor to roll the funds to the inherited IRA. However, in all 3 cases there was an execution error or mental incapacity issue, and none of those appear to be an issue for this client since the distribution appeared to be gifted per original intent. It is not likely worth the money to pursue a letter ruling unless similar circumstances to the other rulings exist.
Further, if the distribution was needed to satisfy an RMD, there would be no possibility of a favorable ruling.
Permalink Submitted by Bruce Steiner on Mon, 2012-06-11 01:00
Perhaps. See Gunther v. United States, 573 F. Supp. 126 (W.D. Mich. 1982) http://scholar.google.com/scholar_case?case=17612273225034459222&q=Gunth…(1982)&hl=en&as_sdt=2,31 and Temp. Treas. Reg. § 54.4981A-1T, Q&A d-5(c) http://www.law.cornell.edu/cfr/text/26/54.4981A-1T .