combining a Beneficiary IRA into a Trad IRA?
We have a client that is has had a bene IRA for several years…he is not 59 1/2 and it is our understanding that now the our client is 59 1/2 we can combine his beneficiary IRA into his traditional IRA. Is this correct?
Permalink Submitted by Charles Hackett on Wed, 2010-10-13 14:57
Wendy,
Is the client the spouse of the original IRA owner? If so, the answer is yes, he can do a spousal rollover. If he was a non-spouse beneficiary he cannot roll over an inherited IRA to his own IRA.
Permalink Submitted by Wendy Mommaerts on Wed, 2010-10-13 15:16
It looks like I mistyped…it should state the our client IS over 59 1/2….Yes our client is the spouse of the original owner. Thanks for the clarification!
Permalink Submitted by Joseph Arsenault on Wed, 2010-10-13 22:07
A spouse may re-title or rollover the inherited IRA to an owner IRA. There is no timeline for doing this. Many times a spouse will perform this type of planning, keeping the IRA as inherited while there is no 10% penalty, then performing a re-title or rollover to owner IRA when they reach 60 years old so there is no RMD requirement until they are 70 1/2. A non-spouse cannot do this. Non-spouse beneficiaries must keep the IRA as an inherited IRA and any distribution is a deemed distribution ineligible for rollover.