Rolling Personal IRA Into Inherited IRA?
Hi All,
I have a client who has a small personal IRA. She inherited her late husband’s large IRA and is taking RMDs as they were prior to husband’s death (he was 90 at time of death). She has asked if we can transfer her small IRA into the inherited IRA . . . is this prohibited?
Permalink Submitted by Jose Morales on Thu, 2016-08-25 16:56
No she cannot move her personal IRA into the inherited IRA, but she can either treat the inherited IRA as her own and then combine the two IRAs. Unless there is a reason why keeping the inherited IRA is favorable (such as the spouse being under 59 1/2 and needing a source of penalty free distributions) this would probably be the best option.
Permalink Submitted by Alan - IRA critic on Thu, 2016-08-25 16:58
Yes, as long as she is the sole beneficiary on this inherited IRA she can transfer her own IRA into it. This will result in her owning the entire combined IRA. She should have made this IRA her own anyway ASAP after husband’s death. This will protect the stretch for her beneficiaries and reduce her RMDs. How old will she be at the end of 2016, did she complete his year of death RMD if he did not do so, and what year did her husband pass?