IRA Contribution after death
Client passed away prior to making any IRA contribution for 2009. Can the surviving spouse make a 2009 contribution to the IRA for himself and for the deceased spouse?
I could not find a reference to this in PUB 590, where can I read about this topic?
Permalink Submitted by Anonymous (not verified) on Tue, 2009-11-10 17:21
I don’t have a clear reference, but my interpretation of an IRA is that it is intended for “saving for retirement”. In that spirit, I can not imagine the IRS allowing this.
I’m sure someone else may have IRS language to that effect.
pmk
Permalink Submitted by Alan Spross on Tue, 2009-11-10 18:41
No post death contribution allowed for the decedent, however a spousal contribution may be allowed using the decedent’s earned income earlier in the year of death.
With respect to a TIRA spousal contribution, the age of the surviving spouse must be under 70.5, although the decedent could have been older.
Permalink Submitted by Roger Kruse on Thu, 2009-11-12 15:00
There is not a reference to the timing of contribution in the year of death in publication 590. Does anyone know where the tax code addresses this question?
Permalink Submitted by Alan Spross on Thu, 2009-11-12 16:19
The tax code does not specifically address post death contributions, since the code typically does not enumerate what cannot be done in favor of what can be done. This leaves us with letter rulings:
http://www.retirementdictionary.com/faqs/caniracontributionbemadefordece…
Permalink Submitted by Roger Kruse on Thu, 2009-11-12 19:24
§ 408. Individual retirement accounts
(a) Individual retirement account
For purposes of this section, the term “individual retirement account” means a trust created or organized in the United States for the exclusive benefit of an individual or his beneficiaries, ….
219.Retirement Savings
(a) Allowance of deduction
In the case of an individual, there shall be allowed as a deduction an amount equal to the qualified retirement contributions of the individual for the taxable year.
While they did not provide a definite decisionwith regards to my question, the IRS took the position that an IRA is only for the benefit of the individual and that the contribution is a decision by the individial and no other. They indicated that this question had never been posed in the past.
Further reading of the tax code reveals
408 seems to indicated that the IRA is for the benefit of the individual [u]or his beneficiaries.
219 seems to indicate that a deduction can be taken for the taxable year.
Does this argument hold water?