New 2007 – puts some of “Parlay Your IRA…” out o
Hi
Since in 2007, nonspouse beneficiaries can rollover inherited IRA’s (pub 590 pg 3), is much of the emphasis to leave an IRA to a younger person for the purpose of the “stretch” no longer applicable?
Starting 2007Wouldn’t all beneficiaries rollover their inherited IRA’s and thus there would be no need for RMD applications or a “stretch”?
Can you now pass this tax free investment from generation to generation through rollovers?
thanks for shedding some light,
Tracy
Permalink Submitted by [email protected] on Mon, 2007-08-27 01:53
Non-spouses can never do 60-day “Rollovers”. What they can do is inherited IRAs from IRAs (transfers). They can also do “Direct Rollovers” from QRPs. So nothing has changed as far as IRA Stretches. What has changed, as per PPA 2006 and TCA 2007 (modifying PPA 2006), is that QRPs must allow a non-spouse bene to have a DB directly transferred (a direct rollover) to an inherited IRA, thus also allowing a “stretch”
Permalink Submitted by Alan Spross on Tue, 2007-08-28 03:25
The TCA is not yet law, and exists in both a Senate and house competing bill. The final provisions will have to be worked out in joint committee in September, but passage prospects appear excellent.
RMDs still apply to these non spouse inherited IRA accounts unless the 5 year rule applies.
Permalink Submitted by Janine Janine on Tue, 2007-08-28 11:21
What is a QRP, please?
Thank you very much.
Janine
Permalink Submitted by [email protected] on Tue, 2007-08-28 15:04
Qualified Retirement Plan (a Pension Plan, such as 401(k), defined benefit, defined contribution, 403(b), etc.).