Roth Conversion by Sucessor Beneficiary

I have a client that inherited an IRA from their deceased spouse, who inherited that IRA from a parent, so the client has inherited the inherited IRA, or I believe is the “Successor Beneficiary”.

Is client able to convert the IRA to a Roth since it was inherited from their spouse, or does that fact that they are the successor beneficiary of that IRA and the original owner was not their spouse disqualify them from Roth conversion?



Successor beneficiaries including spouses are not able to convert inherited IRAs because a conversion is technically a distribution and rollover and a non spouse inherited IRA distribution is never eligible for rollover.

Had the client’s spouse inherited the IRA from a prior spouse and assumed ownership, then the remarried client’s spouse would have owned the IRA and the client would not have been a successor beneficiary. In that situation client could have converted. The client’s spouse would also have defaulted to ownership if they inherited from a prior spouse, did not assume ownership, but failed to take a beneficiary RMD. This might be worth checking into if the client’s spouse inherited from their spouse at the time.

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