Inherited IRA “Transfer” v. “Rollover”
Investor’s father died 2020. Father had Traditional IRA.
In January 2021 investor distributed all the proceeds from the Traditional IRA and withheld taxes.
Upon learning about the ability to transfer the proceeds of a Traditional IRA to an Inherited IRA, investor would like to look at options to do so.
I believe one option would be to rollover the gross proceeds back to the deceased Traditional IRA and then transfer the funds from the deceased Traditional IRA to the Investor’s Inherited IRA.
Is it also possible to “rollover” the gross distribution by sending a check to the Inherited IRA?
In other words, are rollovers allowed, or only transfers?
Thank you.
Permalink Submitted by David Mertz on Wed, 2021-02-17 20:41
As a non-spouse beneficiary, Investor is not permitted to roll over any distribution Investor has received from this IRA. There are no options for getting this money back into an inherited IRA. A non-spouse beneficiary is only permitted to do a non-reportable trustee-to-trustee transfer to move funds from one inherited IRA to another where the funds are not paid to the beneficiary in between.
Permalink Submitted by David Dunn on Wed, 2021-02-17 21:03
Thank you for your reply. May I ask a clarifying question?I understand from your reply that a “rollover” to the investor’s Inherited IRA is not allowed. But am I correct that you are also saying that the investor can not rollover the funds back to the deceased IRA?