Rollover Inherited IRA distribution check to a new Inherited
A Financial institution is asking for a code section that states a beneficiary’s beneficiary may receive a total distribution from an Inherited IRA and has 60 days to roll it over into an inherited IRA with no tax consequences.
A client received an Inherited IRA distribution/check that clearly lists the original IRA owner, the 1st (deceased) beneficiary and the second (living) beneficiary who wants to continue the inherited IRA at a new institution.
The new institution wants proof that the current beneficiary is allowed to rollover the IRA as an Iinherited IRA.
Permalink Submitted by Alan Spross on Thu, 2007-10-11 05:19
This cannot be rolled over because only a surviving spouse can roll over an inherited IRA to their own IRA. Changes of custodians for inherited IRAs can only be done by direct transfer, not rollover and that even applies to surviving spouses who wish to maintain the inherited IRA status.
Therefore, there is no way to produce a code section that supports this rollover and the institution is correct to resist it. The client might try to return the check to the original IRA custodian to have it voided, and then pursue the transfer route. My impression however, is that this is not going to work, but still is worth a try.