Hello! Our client has two inherited IRA accounts from the same deceased original owner, her sister. One inherited IRA was funded from her sister’s IRA. The other inherited IRA was funded from her sister’s 401K. A direct rollover from the inherited 401K was sent to the inherited IRA.
Can we consolidate these two inherited IRA accounts? They are the same account type, the same original deceased owner and have the same beneficiaries named.
Thanks!
Hi Alan,Yes, our client is less than 10 years younder than her deceased sister who passed away in 2021. Our client is 45 and the deceased was 50. She passed before her RBD. We plan on the stretch RMD for both inherited accounts.Thanks!Jeanette
Under these circumstances, the accounts can be combined by directly transferring one of them into the other inherited IRA. However, it is interesting to know of another option available in certain unique cases. Client does have the option of electing LE for one of these accounts, and the 10 year rule for another as an EDB for death prior to RBD. If that option has any benefit (perhaps by limiting RMD income for the next few years), it could be elected by 12/31/2022. If such different RMD method is chosen, then these accounts should NOT be combined.
Permalink Submitted by Alan - IRA critic on Tue, 2021-06-01 20:04
They can be combined if subject to the same RMD treatment. Is client not more than 10 years younger than her sister? What was the DOD? DId sister pass prior to or after her RBD?