inheritated spousal ira
I want to vefify what I read in IRS Pub 590 on inheritating an IRA from your spouse. The deceased IRA owner had not reached 701/2. Spouse is sole beneficiary and is taking RMDs on his own IRA. He wants to treat himself as the beneficiary on the inheritated IRA and not have to take RMDs on the inheritated IRA for 3 years (when his spouse would have turned 701/2). I want to verify that he can take the distribution from his wife’s IRA and roll that distribution over to an IRA titled “Mary Brown Deceased F/B/O John Brown” within the 60-day time limit as long as it is not a RMD.
Permalink Submitted by Anonymous (not verified) on Wed, 2012-11-28 18:36
Will watch this answer as well. From what I know if he takes it as an inherited then he’ll have to either take RMDs on the single non-recalc table just as any non-spouse bene, lump sum or 5 year deferral. Based on what you said he wants to wait for 3 years, but if he takes the 5 yr plan he’ll have to fully distribute by end of 5th year. So if stretching it out over the longest period of time is his goal, taking it as a spousal rollover and taking RMD on the uniform dist. table on his age would be the best bet. Just my 2 cents, but I’ll watch thread for anything different.
Permalink Submitted by Alan Spross on Wed, 2012-11-28 20:41
The sole beneficiary spouse can have the IRA retitled in beneficiary form. RMDs do not begin until the end of the year the decedent would have reached 70.5. The surviving spouse can roll over that inherited IRA at any time to their own IRA and take RMDs as the owner when it is beneficial to do so.
In any year after the death of the first spouse, if the surviving spouse rolls over the inherited IRA, they are treated as if they were the owner all year, and the RMD for that year would be that calculated from the Uniform Table as owner, not the one required as beneficiary. Also, if the surviving spouse FAILS to take the RMD as beneficiary, they default to ownership status under the tax code even if they do not ask to become the owner. In that case the IRS would expect the owner RMD to be taken for that year.
Permalink Submitted by Rod Rollins on Mon, 2014-10-13 17:08
If the surviving spouse rolled over the 401k from the deceased spoused into an IRA in her own name, can she retitle the IRA back as an inheritated IRA if no withdraws have taken place. Or does this mean the spouse has taken ownership of IRA and there is no undoing it? Or can she take a withdraw as an inheritated IRA withdraw. Both spouses were 45 at the time of death.
Permalink Submitted by Rod Rollins on Mon, 2014-10-13 17:08
If the surviving spouse rolled over the 401k from the deceased spoused into an IRA in her own name, can she retitle the IRA back as an inheritated IRA if no withdraws have taken place. Or does this mean the spouse has taken ownership of IRA and there is no undoing it? Or can she take a withdraw as an inheritated IRA withdraw. Both spouses were 45 at the time of death.
Permalink Submitted by Alan - IRA critic on Mon, 2014-10-13 18:40
Depending on the circumstances, it may be possible to convince the custodian to re title the IRA in inherited form. Characteristics that enhance this possibility include custodian error, NO distributions taken since the rollover, and rollover being done into an IRA with no prior balance. Time is also critical, as every passing day will reduce the chances of custodian cooperation, particularly if a calendar year end has occurred and the custodian has done their 5498 reporting. It is worth the effort as re titling as an inherited IRA will avoid the surviving spouse having to consider a rigid 14 year 72t plan to secure penalty free distributions before 59.5. Here is some material on related re titling issues, although not the identical scenario to this situation: http://www.retirementdictionary.com/faqs/decedentsnameinheritedira