Beneficiary IRA Distribution for spouse
My client has a beneficiary ira from her husband who passed 10 yrs ago(he would be 57 now).
She is 51 now and needs some money out of this account. Is there a penalty on the distribution? Does this start some clock on distributions going forward?
Thanks.
Mike Sicuranza
Permalink Submitted by Alan - IRA critic on Thu, 2015-07-16 19:58
As long as she maintained the IRA as inherited and did not assume ownership of the IRA, she can take penalty free distributions at any time. They would be coded as death benefits (Code 4 on 1099R). She also has no beneficiary RMDs if she was the sole beneficiary until the year her husband would have reached 70.5. But she should roll this over to her own IRA after she reaches 59.5 and she will have no RMDs until she reaches 70.5. Be sure she has named her own successor beneficiary on the inherited IRA in the meantime.