Deceased owner’s open date
Can we use the deceased owner’s Roth IRA open date as the open date on the Roth IRA beneficiary separate account? This would allow the credit union to report a code Q (totally qualified) rather than a code T(not met the 5 year test) if the open date of the account has met the five-year test at the time of the beneficiary withdrawal.
Permalink Submitted by Alan Spross on Tue, 2009-03-31 20:16
Yes, the deceased’s holding period is included with the beneficiary’s holding period. But even if the CU insists on a T coding, the beneficiary can still report the distribution as qualified, and avoid using an 8606. The beneficiary should retain some evidence of the original holding period in the event the IRS inquires about treating the distribution as qualified.
The instructions for Form 8606 indicate that a distribution that is actually qualified should not be listed on line 19.