She should be able to do this, subject to the one rollover rule per 12 month period. The reason this can be done is a spousal beneficiary’s IRA is not treated as an inherited IRA under the rule that prohibits rollovers from inherited IRA accounts. See copy of IRS Code section, last line:

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(C) Denial of rollover treatment for inherited accounts, etc.
(i) In general
In the case of an inherited individual retirement account or individual retirement annuity –
(I) this paragraph shall not apply to any amount received by an individual from such an account or annuity (and no amount transferred from such account or annuity to another individual retirement account or annuity shall be excluded from gross income by reason of such transfer), and
(II) such inherited account or annuity shall not be treated as an individual retirement account or annuity for purposes of determining whether any other amount is a rollover contribution.
(ii) Inherited individual retirement account or annuity
An individual retirement account or individual retirement annuity shall be treated as inherited if –
(I) the individual for whose benefit the account or annuity is maintained acquired such account by reason of the death of another individual, and
(II) such individual was not the surviving spouse of such other individual
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All that said, it is very possible that she could run into resistance from the current and prospective IRA custodians, so it would be wise for her to get their agreement to take the funds back before she takes the money out. Perhaps a copy of the above will be needed…………….

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