recharacterize to inherited IRA an IRA that was inherited but characterized as regular IRA
Husband (73) died. Wife (58) inherited (as IRA beneficiary) his SEP-IRA. Resulting IRA was mischaracterized as regular IRA. Can it be re-characterized as an “Inherited IRA” so she can withdraw without penalty before she’s 59-1/2? If so, how do you do that?
Permalink Submitted by Alan - IRA critic on Thu, 2022-04-14 22:52
Once a spousal rollover is done (surviving spouse assume ownership), it cannot be reversed. It’s a common error to assume ownership before reaching 59.5 since distributions are subject to penalty until 59.5 is attained. Fortunately, wife only has around 1 year to go before her distributions will be free of the penalty.