RMD AFTER DEATH
I was quoted the IRS Reg. 1.401a(9)-(3), Q3 by Alan-oniras
wife inherited a thrift saving plan from husband who passed away in 2007 at the age of 69. His date of birth was 1-08-1938.
TSP rolled over the plan except for the RMD amount which went to her. she is only 69 (4-11-1939). She doesn;t need the money.
Alan said that no RMD should have been sent out to her due to the IRS Reg cited above.
I cited the above to TSP and they said, that rule only applies if he is alive. since he passed away the rule: 1.401 a(9)-(5) question & answer #5 in conjuction with Q#3…so since he would have been 70 1/2 in 2008 they sent the RMD to his wife. If he was alive he could of postponed his rmd until 4-01-09.
Is this correct Alan or what can I do? I am not that fimiliar with the codes.
his name is Chip Rowe ( a manager @ TSP) and his personal
#205-439-4561. Not sure if you ever call anyone.
does she still have the right (if they are correct) to cash the check and send a personal check to her IRA that was rolled over (including the 20% withheld for taxes) to avoid the RMD?
Please help.
douglas
Permalink Submitted by Alan Spross on Mon, 2008-03-10 23:12
Douglas,
With this particular situation, we are re visiting the identical highly confusing situation from an 11/2/07 series of postings. I based my response on this PLR that was part of reply by Denise Appleby in November, whereby the IRS indicated that the entire amount was indeed rollover eligible. Based on that ruling, if it was rollover eligible, she could complete the rollover herself including the withholding. I would not bother to debate this with the TSP now, as they can indeed cite other sections of the code (402(c)) to back up their conclusion. Besides, they cannot get the money back from the IRS now. So, with opinions going both ways, I guess it is up to her whether to proceed or not.
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From Denise:
Take a look at PLR 200222033
Summary
Participant died at age 58
Participant would have reached age 70 ½ in 1997 ( see page 2)
Spouse beneficiary rolled over the entire balance in 1997 ( same year he would have reached age 70 ½) [ second paragraph from bottom of page 2]
Requested ruling # 1, that the entire balance was rollover eligible, and none of the balance constitutes an RMD
IRS ruling… the entire balance was rollover eligible, because it was rolled over before December 31 ( page 5)
I know PLRs are not citable, but…
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