Aggregating inherited IRAs-same decedent
Facts:
I client has 3 separate inherited IRA’s from the same person
One is a traditional, one is rollover IRA, and one is a SEP.
Question:
Can all the IRAs be trustee transferred into one IRA? subsequently have all RMD’s taken from the one IRA?
In other words, does the IRS consider a rollover, SEP, and Traditional IRA all the same type of IRA?
all help is greatly appreciated.
Thank you
Permalink Submitted by Alan - IRA critic on Thu, 2014-06-19 18:46
They are all versions of a traditional IRA. They can be combined by direct trustee transfer (not by rollover), but if the RMD divisor is not the same for any reason, only the accounts with the same divisor should be consolidated. Why would the divisors differ? That would happen if one of the accounts was inherited directly from the decedent, but another was first inherited by the decedent before eventually passing to the client as successor beneficiary. Divisor could also differ if one of the accounts had more than one beneficiary, but separate accounts were not created by 12/31 of the year following the year of death. Only combine accounts that have the same divisor. Combination is therefore one issue, but even if they cannot all be combined, client can still take the correct total RMD from any combination of the accounts.