I have a client who passed in 2020 and left 5% of his IRA to his sister, who is a Canadian citizen, but not a US citizen. The current custodian of the IRA will allow the Canadian sister to establish an Inherited IRA to receive her 5% beneficial share, however, it will then restrict the Inherited IRA account and will not allow distributions from the Inherited IRA over the 10 year allowable period. She must either take a taxable distribution of the entire Inherited IRA account or transfer the Inherited IRA to another custodian who will allow for her to maintain the Inherited IRA.

– Is there any reason why she cannot maintain the Inherited IRA from a US tax perspective to be distributed over the next 10 years (assuming we can locate a custodian that will allow a Canadian citizen to custody the Inherited IRA)?

– Is there any reason why she cannot maintain the Inherited IRA from a Canadian tax perspective?

– If the Inherited IRA for the Canadian citizen is allowed to be maintained over the next 10 years, do you have any recommendations for a custodian who will custody the Inherited IRA for a Canadian citizen?