Beneficiary IRA
Can a spouse who inherited her spouses IRA in 2009 and was coded as a beneficiary IRA convert it to her own IRA? Or is she stuck with the beneficiary classification?
Can a spouse who inherited her spouses IRA in 2009 and was coded as a beneficiary IRA convert it to her own IRA? Or is she stuck with the beneficiary classification?
Permalink Submitted by Alan - IRA critic on Thu, 2014-02-06 17:55
Yes, she can roll it over to her own IRA. This can be done anytime she wishes, although if she is under 59.5 it would result in any distributions she takes being subject to the penalty. If she has been taking RMDs since 2010, her RMDs will be reduced if she rolls this over to her name and 2014 RMD would be calculated as if she owned the IRA the entire year. In other words, if she is not yet 70.5 there would be no RMD for 2014 or until she reached 70.5.
Permalink Submitted by Steve Hoover on Thu, 2014-02-06 19:43
Does this hold true for an inherited IRA?
Permalink Submitted by Alan - IRA critic on Thu, 2014-02-06 19:52
If you are asking whether an account which is already an inherited IRA for the spouse, and after the spouse passes can be rolled over by the surviving spouse, the answer is No. The survivng spouse must be the first beneficiary of the IRA in order to roll it over as their own.
Permalink Submitted by Steve Hoover on Fri, 2014-02-07 14:39
The husband died in 2009 (his age was 65 at his time of death) and the spouse set up his IRA as an inherited IRA for herself. Can she now change it to her own IRA?
Permalink Submitted by Alan - IRA critic on Fri, 2014-02-07 16:17
Yes, if husband was the ORIGINAL IRA owner and had not inherited it from another such as a parent. Sounds like he was the original owner and therefore his wife who had been treating the IRA as inherited can still roll it over to her own name anytime she chooses.
Permalink Submitted by Steve Hoover on Fri, 2014-02-07 22:16
I talked with the custodian and they said that they cannot convert this to the spouses name. They said once it’s titled an inherited IRA it cannont be retitled to the surviving spouses name. Is there a IRS rev code I can share with them?
Permalink Submitted by Alan - IRA critic on Fri, 2014-02-07 23:39
http://www.gpo.gov/fdsys/pkg/CFR-2013-title26-vol5/pdf/CFR-2013-title26-vol5-sec1-408-8.pdf
“However, if you receive a distribution from your de-ceased spouse’s IRA, you can roll that distribution over into your own IRA within the 60-day time limit, as long as the distribution is not a required distribution, even if you are not the sole beneficiary of your deceased spouse’s IRA.”