Cashed out spousal IRA?
My now deceased mom inherited an ira from my step father and from the statements that I have, it appears it is now a taxable account. Could she have cashed the ira out and put the same mutual funds into a taxable account? Everything appears to be the same except the account number. Would taxes have ben taken out then or filed with the 1040?
I am missing some statements so I can’t tell what really happened, I always assumed this was a taxable account and have since transfered it in kind to another brokerage so it isn’t like I can go back to the original brokerage and ask what happen. Would they have advised her to do something like that? My step dad was receiving rmd’s and my mom would have also.
Thanks for any help with this. Emerson
Permalink Submitted by Alan Spross on Thu, 2008-01-24 00:41
Of course, any miscommunication could have occurred along the way. One way to possibly trace this is the chronology of 1099 forms issued since your step father’s death. If an inherited IRA was mistakenly distributed to a taxable account, there would be a noticeable tax bill for that year. You might contact whoever has been doing the tax prep for your Mom over this period as there should be a paper trail there, although you are probably not going to be able to rectify an error at this point unless the written documentation you discover is clear that some firm was fully negligent in executing a written instruction.