1099-R for Inherited IRAs
I’ve inherited a Roth & a Traditional IRA account in 2021. Using the same company as the original owner, I opened Inherited accounts & the assets transferred into new accts with new acct numbers. After the traditional acct was funded, I took the RMD for 2021,which was year of death for original owner & had not been taken before her death. Would this remaining account balance be considered a rollover? Should I received a 1099-R showing the amount rolled over in Box 1 as a Gross distribution and the taxable amount in Box 2a as zero? If so, would box 7 be coded a 4, for death? Also, should the ROTH acct receive a 1099-R rollover as well? I received a 1099-R for the RMD distribution amount, but no other 1099-R. Thanks.
Permalink Submitted by Alan - IRA critic on Sun, 2022-02-20 20:25
There should be no 1099R because you did not take a distribution, the funds were moved by direct trustee to trustee transfer. A non spouse beneficiary can never do an indirect 60 day rollover and any distribution actually received from the inherited IRA would be taxable, except for an inherited Roth IRA.
You received a 1099R for the RMD because that was a distribution payable to you, and those are not eligible for rollover.
You will need to know if you qualify for LE RMDs or if you are subject to the 10 year rule as most are? You will also need to know if the Roth IRA has passed the 5 year holding period or not.
Permalink Submitted by Patricia Giroux on Sun, 2022-02-20 21:25
Thanks so much for the speedy reply! The 5 year holding period has passed for the ROTH but since both IRA’s are under the 10 yr rule, I will leave the ROTH alone until 2031. Thanks for helping everyone by answering their questions. I really appreciate it!