403B Question
We have a client who passed away in 2011, he was over 70 ½ at that point and receiving distributions.
It is a 403B account and the beneficiary is wanting to take the lump sum, open an new IRA and invest the assets (within the 60 day timeframe). Will this result in a taxable event?
The advisor is questioning this and we can’t get a straight answer from any of the carriers/CPAs we work with.
Any help would be much appreciated!
Permalink Submitted by Alan - IRA critic on Thu, 2013-03-21 20:35
There is no 60 day time frame here because any distribution cannot be rolled over. Beneficiary will need to request a direct rollover to an inherited TIRA or inherited Roth IRA. A direct rollover will not be taxable unless it goes to an inherited Roth IRA. However, since the direct rollover was not completed by 12/31/2012, the RMDs from the inherited IRA will have to adhere to the RMD provisions of the 403b plan for participants who pass after the required beginning date.