60 day rollover – Death within the 60 days
Hi! A client took a distribution from his IRA and planned to put the distribution back into his IRA within the 60 days. He passed in this time frame and now his wife is wondering how to get the distribution back into the IRA so she doesn’t owe taxes. Does anyone have guidance with this scenario? We have to open an inherited IRA in her name because her husband has passed but does she put the distribution into her inherited IRA and what kind of documentation needs to happen? Thanks!
Permalink Submitted by Alan - IRA critic on Fri, 2024-07-12 19:45
If an IRA owner or plan participant takes a distribution, but then dies while the money is still outside of a qualified account, his executor (or those responsible for his financial affairs) may roll that distribution over. In a court case from way back in 1982, an employee took a distribution from his work plan but died before rolling it over. The court allowed his executor to roll over the distribution. Is his wife the executor?
Hopefully, the IRA custodian here is aware of this option and will not resist. A self certification form be needed if 60 days has passed from when he received the check. Note that the decedent must have been eligible for a rollover (not having done one in the prior 12 months), and none of the distribution was an RMD.