Roth conversion-owner dies after conversion
An IRAowner has the option to spread out the income from a conversion to a Roth into 2011 and 2012. If they convert in 2010 and die that same year, are they then required to pay the total taxes on their final 2010 return? Or is there some option that allows their estate to still pay those taxes in 2011 and 2012 as originally intended instead of having the income lumped into 2010? I’m sure this could trip up some well intended estate planning.
Steve
Permalink Submitted by Alan Spross on Wed, 2010-03-17 04:23
There are quite a few options here:
1) Executor can recharacterize all or part of the conversion by the extended due date
2) If not recharacterized, and spouse is not sole beneficiary, the income must be fully reported in 2010 or year of death if later
3) A sole spousal beneficiary has the option to report the income in the same years the decedent would have and must make that irrevocable decision no later than 10/17/ 2011.