Deadline for transfer of Inherited IRA
My client’s Father passed away August 8, 2012. She has been told there is no time limit for transferring IRA accounts into an Inherited IRA. I believe there is a one year deadline – the IRA accounts need to be transferred prior to August 8, 2013. Which is correct? Thank you.
Permalink Submitted by Alan - IRA critic on Mon, 2013-07-15 21:38
There is no deadline, but if separate inherited IRA accounts are not established by the end of the year following the year of death (12/31/2013 in this case), RMDs when there is more than one beneficiary must be based on the oldest beneficiary. Another problem in waiting to re title the inherited IRA is that RMDs will not be distributed and that could result in a 50% excess accumulation penalty for each year’s RMD not satisfied in time. No distributions can be made until the account is correctly titled in beneficiary format.