Can you 60 Day RO from dead spouse IRA to survs spouse IRA
Hi,
IRA distrib was taken in August 2012 in excess of RMD while client was alive to pay med. bills. HE died so $ was not needed. Spouse wants to save tax $ by putting back into her IRA using 60 day rollover rule since she is 100% IRA benef and wants to treat as her own.
If ok, can you cite the relevant regulation. 1 custodian said it was not ok, 1 said they would take it but wants client to talk to a tax adviser. They want a letter saying client spoke to a tax adviser. If no one can find a regulation, would you do it? E.g what are the risks, since custodian would not know if surviving spouse is putting $ in from IRA dist she took from her own IRA at another custodian.
Thanks very much!
Permalink Submitted by Alan Spross on Fri, 2012-09-14 23:10
There are no IRS Regs addressing these rollovers, but there are several IRS letter rulings allowing a sole beneficiary surviving spouse to roll over distributions taken by the decedent within 60 days (and sometimes beyond 60 days).
There are the letter rulings: PLR 2004 15012, 2004-20037, 2004-18045, 2005-20038, and 2007-17021.
In the case of 20038, the IRS also approved rolling the proceeds back into the decedent’s IRA, but this would probably be harder to get a custodian to accept.
Sole beneficiary surviving spouses have been allowed to make several post death changes that non spouse beneficiaries have not been able to do. Your challenge here is not the IRS, but the IRA custodian agreeing to accept the rollover. In your case as you mentioned, there is no particular need to advise her IRA custodian where the rollover came from. If she is not comfortable doing that and the custodian insists on a letter from a tax advisor, you could use the above references to secure such a letter. Or you could find another custodian who would agree to this and do a direct transfer of her IRA to the new custodian.