Client received a check less federal and State tax. Example $500,000 less $100,000 federal tax less $10,000 state tax, net check $390,000 Are we allowed to roll-over into a beneficiary IRA. If so can we fund $500,000 or only $390,000?
If a decedent has two IRAs from two separate custodians, can I as the successor beneficiary combine them into one new Inherited IRA account with a new custodian? Some of the paperwork from one of the two original custodians says inherited accounts can’t be combined but I’m assuming they’re referring to not combining with a standard IRA.
Yes, as long as the IRAs of the decedent were inherited directly from the decedent and are subject to the same RMD requirement, you can combine them. They cannot be combined with your own IRAs and they cannot be combined if you are a successor beneficiary of one of them (which could also mean that they would have different RMD requirements).
To clarify, if these are my mother’s IRAs for which I am the beneficiary I can then combine them into one inherited IRA, correct? I am actually considered the beneficiary as opposed to the successor beneficiary as I originally stated above, right?
If your mother OWNED the IRAs rather than being a beneficiary herself, and if YOU are her sole beneficiary, then you can combine them into a single inherited IRA. If you are not her sole beneficiary, you MIGHT be able to combine them, but we would need more info regarding your creation of separate inherited IRA accounts from the other beneficiaries.
While the IRS has not been specific about improperly combined inherited accounts, it is most likely that if the RMD divisors were different, combination of the accounts would make the new account subject to the higher % of the RMDs that applied to the prior accounts.
Permalink Submitted by David Mertz on Tue, 2020-12-29 19:24
No part of a distribution paid to a non-spouse beneficiary is eligible for rollover. There was an exception for amounts paid to a beneficiary that would have been RMDs were it not for the CARES Act, but the deadline for that sort of repayment was August 31, 2020.