Permalink Submitted by Alan Spross on Tue, 2008-07-22 19:36
The answer to this is now more complex due to Sec 824 of the PPA. Here’s where we are now:
1) Spousal inherited IRA could always be converted to an owned Roth IRA
2) Non spousal inherited IRA cannot be converted either to an owned or inherited Roth IRA.
3) Effective this year, under Sec 824 of the PPA, a beneficiary of an eligible retirement plan (not an IRA) can complete a rollover to a Roth IRA as follows:
a) Spouse beneficiary by rollover or transfer to an inherited Roth or to an owned Roth.
b) Non spouse beneficiary by direct transfer only to an inherited Roth IRA, not to an owned Roth IRA
The transfer for a non spouse beneficiary is optional for the plan, so some plans may not offer it until Congress makes it mandatory.
Permalink Submitted by Alan Spross on Tue, 2008-07-22 19:36
The answer to this is now more complex due to Sec 824 of the PPA. Here’s where we are now:
1) Spousal inherited IRA could always be converted to an owned Roth IRA
2) Non spousal inherited IRA cannot be converted either to an owned or inherited Roth IRA.
3) Effective this year, under Sec 824 of the PPA, a beneficiary of an eligible retirement plan (not an IRA) can complete a rollover to a Roth IRA as follows:
a) Spouse beneficiary by rollover or transfer to an inherited Roth or to an owned Roth.
b) Non spouse beneficiary by direct transfer only to an inherited Roth IRA, not to an owned Roth IRA
The transfer for a non spouse beneficiary is optional for the plan, so some plans may not offer it until Congress makes it mandatory.