401k Rollover to Roth
I have a client who is near death, her daughter (beneficiary) wishes to roll over her mother’s 401k directly to a Roth IRA. Can she do this after her mother is deceased? Also in 2010 can she spread the conversion over two years in order to reduce her tax liabilities?
Permalink Submitted by Alan Spross on Tue, 2009-08-11 03:36
Yes, the two year income reporting deferral for 2010 conversions also applies to conversions from a 401k to a non spouse inherited Roth IRA. Since RMDs for a non spouse inherited TIRA OR ROTH IRA begin in the year following death, there might be an RMD due that must come out prior to any conversion and cannot be rolled over or converted. The transfer to an IRA is NOT mandatory for a 401k plan until 2010, although many plans are offering them now on a voluntary basis.