Can a spouse rollover a tIRA of deceased spouse directly to Roth IRA?
Husband died with a tIRA. Can a spouse beneficiary rollover the tIRA directly into her own Roth IRA, or must she first roll it into her own tIRA and then convert it into her own Roth IRA?
If it can be done directly, is there any difference in what tax forms would be generated or how this would be reported? I assume in both cases the entire IRA would be deemed income to the spouse?
Permalink Submitted by Alan - IRA critic on Wed, 2021-12-08 00:00
The rollover can be done directly to the Roth IRA. However, any RMD for the year not completed by husband is not eligible for rollover or conversion. There will also be a difference in the conversion taxes if the husband’s TIRA basis % differs from that of the surviving spouse. Finally, based on the amount of the inherited IRA, it may not be wise to convert the entire account, although the year of death may be the last year the surviving spouse can file jointly and therefore convert in a lower tax bracket than her single bracket.
Permalink Submitted by Joe Deere on Fri, 2021-12-17 17:21
thank you, Alan. The decedent had significant NOLs exceeding the size of the IRA, and the spouse has no existing IRA, which is why we wanted to convert 100% of it to Roth this year as it should be tax free. Do you know technically how to rollover directly to Roth and what forms are created?I see the IRS says a spouse can (1) treat the IRA has her own, (2) rollover to her own traditional IRA, or (3) treat herself as a beneficiary. I don’t see something explicitly saying she can rollover to a Roth. Is this effectively her treating the IRA as her own per option 1 above (does the custodian need to retitle for this), and then converting to Roth, or just directly doing option 2 above into a Roth?Will she just get a single 1099-R from the custodian? thank you!