Follow up to incomplete question that no response was given
I sent in a question does a non spousal Ira beneficiary such as a child have to make a RMD this year and after reading the newsletter it looks as if the answer is no.Also is the non spousal beneficiary allowed to rollover the inherited IRA to their own IRA and then wait to 70 1/2 to make the RMD or do they have to have a beneficary Ira and make the distrbution based on current age using the single life expectancy table?
Permalink Submitted by mk foss on Thu, 2009-03-26 16:38
A nonspouse beneficiary cannot rollover an inherited IRA. They can “transfer” it to a new custodian but it must remain a beneficiary IRA showing the name of the original owner. Except for 2009, an RMD is required each year from a beneficiary IRA.
If they were to rollover the IRA, it would become immediately taxable in full. If they were to wait until age 70 1/2 to take distributions, there would be a 50% penalty on the amounts not taken each year until they reach age 70 1/2.