Beneficiary IRA for a spouse

Submitted by Mobey on Thu, 2018-12-06 21:35

Got a client who’s previous advisor rolled her deceased husband’s IRA into a bene IRA for her (because she was not 59-1/2 at the time her husband passed I assume).

We rolled it over as a bene IRA…

I assume:
1 – we can roll it into her own IRA now (she’s now 60)
2 – that we don’t have to take a RMD for the bene IRA for 2018, the year we rolled it into her IRA

Am I right?

Thanks



Submitted by Alan - IRA critic on Thu, 2018-12-06 22:51

  1. Yes, but do not take a distribution from an inherited IRA. First, have her notify the custodian that she is electing to treat this inherited IRA as her own. Then she can do a non reportable transfer to another IRA without using up her one permitted 60 day rollover.
  2. This is correct since she is treated as if she owned the IRA the entire year. However, if she took an actual distribution from the inherited IRA before it was re titled, it would be coded 4 (death distribution) and would be treated as a beneficiary RMD.
  3. Sounds like she might have been taking beneficiary RMDs from this IRA?  If she is the sole beneficiary she does not have to take beneficiary RMDs until the year the deceased spouse would have reached 70.5.

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