Multiple Inherited IRA Accounts Combined to Avoid 60 Day Rollover Rule

There are several IRA’s being received by the beneficiary (Non-spouse) into two separate inherited IRA accounts. These accounts are being established at two different investment custodians.

Assuming the distributions to the beneficiary are handled as a direct transfer to the new inherited IRA accounts, then a trustee to trustee transfer of the now two inherited IRA’s to one combined inherited IRA account can occur without any issue with the once per year 60 day rollover rule correct?

Thank you



Correct.  An IRA inherited by a non-spouse beneficiary is permitted to be moved only by trustee-to-trustee transfer.  A trustee-to-trustee transfer of an IRA is neither a distribution nor a rollover and is not reportable.  Since there is no distribution or rollover, the 60-day rollover rule does not apply.  If a distribution *is* made to a non-spouse beneficiary, it is not permitted to be rolled over and is forever distributed.

Not sure how many IRAs were inherited here, but at least two and perhaps many more than two. Be very careful about combining various inherited IRAs accounts because the most recent decedent is not always the owner of all inherited IRAs, and there could be multiple scenarios with respect to RMDs. While the IRS has not been specific about this, if inherited IRAs subject to different RMD rules are combined, it is logical to expect that the combined account would become subject to the most restrictive RMD schedule of any of the inherited accounts that were combined. It is likely that passing under the Secure Act (death after 2019 if an IRA) is more likely to produce an identical RMD requirement for the component accounts, ie the 10 year rule, in comparison to deaths prior to Secure. We would need the specifics in order to determine if all these accounts are actually subject to the same RMD requirements.

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