Inherited IRA titling
Hello all, I have inherited 3 Non spouse traditional IRA’s from my late mother. The IRA’s are CGM,Fidelity and Vanguard. I have the required forms for all of them. The thing that is bothering me is they all have a space for the original IRA owners name and a space for the beneficiary info. Non of them have a space where the all too important and prolific titling of “Jane Smith IRA deceased 8/6/15 for benefit of Jim Smith Inherited IRA” that is pounded into our heads when reading about this subject. I think I am being too paranoid but I just want to preserve the hard work my parents went through for all those years to give me this wonderful opportunity. Also I assume the IRA custodians will code or flag the inherited IRA so distributions are reported as “death distributions” with code 4 in box 7 of IRS 1099-r form.
Hopefully all goes well…
Thanks, Chris
Permalink Submitted by Alan - IRA critic on Fri, 2015-08-07 15:57
Custodians have different ways of titling beneficiary IRAs. The IRS only requires that both the name of the decedent and the name of the beneficiary are shown. The DOD is not required. Probably the most common method would read “ck as beneficiary of jk”. Just be sure that both names are shown after the papers are processed. It would be very rare that the 1099R would not be coded R, but in the event it is wrong, just have it corrected ASAP. There are RMD rules that will apply and these rules also affect whether you can combine these inherited IRAs into a single account or not. Remember that you must complete the year of death RMD if it was not completed, and most importantly you can only move these accounts to another custodian by direct transfer. You cannot do an indirect 60 day rollover.