Spousal Inherited IRA to Traditional IRA

Submitted by Jonathan Sard on Thu, 2016-11-17 18:21

A client’s wife died in 2014 at 66 years old. At the time, the husband designated the IRA as an Inherited IRA and the deceased wife would have turned 70 1/2 in 2018.

The husband is 68 years old and now wants to move the IRA into his own so he can take RMDs when he is 70 12 using his life expectancy from Table III as opposed to the single life from Table I.

Can he go ahead and move the Inherited IRA to his own IRA at any time? I want to make sure there are no time constraints to make this change. Also, if he wanted to wait to make the Inherited IRA his own, is there a time limit for doing that?

Thank you!!



Submitted by Alan - IRA critic on Thu, 2016-11-17 18:37

  • Yes, he can assume ownership or roll it over to his own IRA anytime he chooses. There is also a default rule that if he fails to take a beneficiary RMD (in 2018), he is automatically deemed to become the owner of the IRA. At his current age he should roll it over now, as there is no downside of doing that. Had he been older than her, he could have avoided RMDs until she would have reached 70.5, but he appears to be the same age.
  • If he already has another owned IRA, he can roll the inherited IRA into that one.
  • If he inherited any basis from non deductible contributions (recorded on wife’s 8606), he would file an 8606 on his own IRA to add the remaining basis he inherited to his IRA.
  • Best to do the rollover by direct transfer to avoid using up his one allowed 60 day rollover for all his IRAs.

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