Only one check was issued, or the pre tax amount has already been transferred by direct rollover?

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There is no simple answer to this one, so let’s try to break down the options.

Assuming this check meets the direct rollover requirements per att’d,

http://www.retirementdictionary.com/Direct-rollover.htm

then the IRA custodian would have to direct it all into the type of IRA indicated on the check. If the check just indicates “IRA”, perhaps the IRA custodian would be willling with proper paperwork to apportion the check according to the client’s request, with only the after tax amount going to the inherited Roth IRA.

Another possibility could be returning the check to the plan to be re issued as two checks FBO each type of IRA respectively. This might be a tough sell.

And before contemplating these issues, note that the 100,000 modified AGI limit for a Roth conversion still applies for 2009, irrespective of the after tax nature of the Roth portion.

If there is no solution other than going to an inherited TIRA account, then the beneficiary should file Form 8606 to report the basis. If this happens there is no way to get any of this money to a Roth IRA. However, if the entire check goes into a Roth IRA, then beneficiary can do a partial recharacterization to an inherited TIRA which would probably net out with the basis being pro rated between the two, but at least some of the money would be left in the Roth with the pre tax amount in the Roth being subject to tax.

Here is the only release to date on these non spouse conversions to an inherited Roth. This is copied from Notice 2008-30:
>>>>>>>>>>>>
Q-7. Can beneficiaries make qualified rollover contributions to Roth IRAs?
A-7. Yes. In the case of a distribution from an eligible retirement plan other than
a Roth IRA, the MAGI and filing status of the beneficiary are used to determine eligibility
to make a qualified rollover contribution to a Roth IRA. Pursuant to § 402(c)(11), a plan
may but is not required to permit rollovers by nonspouse beneficiaries and a rollover by
a nonspouse beneficiary must be made by a direct trustee-to-trustee transfer. A
nonspouse beneficiary that is ineligible to make a qualified rollover contribution to a
Roth IRA may recharacterize the contribution pursuant to § 408A(d)(6). A surviving
spouse who makes a rollover to a Roth IRA may elect either to treat the Roth IRA as his
or her own or to establish the Roth IRA in the name of the decedent with the surviving
spouse as the beneficiary. (See Notice 2007-7, Q&A-13, for a rule on how to title a
beneficiary IRA.) A nonspouse beneficiary cannot elect to treat the Roth IRA as his or
her own. (See Notice 2007-7, Part V.)
In the case of a rollover where the beneficiary does not treat the Roth IRA as his
or her own, required minimum distributions from the Roth IRA are determined in
accordance with Notice 2007-7, Q&As -17, -18 and -19.
>>>>>>>>>>>>>>>>>

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