Undoing an rmd for 2009
I inherited an IRA from my dad in 2009 and the trustee (Key Bank) inadvertantly made an rmd to me and would not undo it.
I subsequently moved the remaining inherited IRA funds to another trustee. The rmd funds are sitting in a regular bank account.
The following link:
http://www.bloomberg.com/apps/news?pid=20603037&sid=a48k1KZtty00
seems to imply that the rmd funds sitting in the regular bank account can be rolled over into an inherited IRA by Nov 30, 2009 with no income tax consequences.
If correct, can these rmd funds be rolled over into an inherited IRA with a completely different or new trustee?
Thanks for your help.
Permalink Submitted by Jose Morales on Mon, 2009-09-28 15:51
The IRS notice that the article refers to is meant for persons who took a distribution of what would have been their RMD and who were eligible to complete a rollover, but did not complete the rollover within the standard 60 day period. They have until November 30th to rollover these distributions. As a non-spouse beneficiary, the rollover option is not available even within the 60 day period.
Here is a link to the IRS notice: [url]http://www.irs.gov/pub/irs-drop/n-09-82.pdf%5B/url%5D
You can find the author of notice listed and there is also an email address for questions regarding the notice. It might not hurt to submit an email presenting your situation and asking for clarification if you feel it is unclear whether the extention of the rollover period also includes allowing non-spouse beneficiaries a rollover option that did not exist before.
Permalink Submitted by Linda Wilson_Albright on Mon, 2009-09-28 21:56
Thank-you for the suggestion. I have forwarded this question to the author of the IRS document.
Will post the IRS reply. Thanks again.
Permalink Submitted by Alan Spross on Mon, 2009-09-28 23:14
Yes, I think Q&A 4 of the release clearly eliminates the rollover of a non spouse inherited distribution because the relief only applies to amounts that would have been rollover eligible were they not RMDs.
Granted, this relief is not totally equitable because most non spouse TIRA beneficiaries would NOT have elected to receive the RMD if they could have stopped it, yet the relief does not apply to them – or to someone who cannot roll the funds back simply because they used up their one rollover per 12 month period.