Inherited IRA Rollover
Client inherited his Dad’s IBM 401(k) last year. He dragged his feet doing anything and received a check from IBM (401k) last week as a total distribution ($50K – $10 withholding). He can roll the $50K over to an Inherited IRA within 60 days, correct?
Permalink Submitted by Alan - IRA critic on Fri, 2022-08-12 13:28
No, that distribution is not eligible for rollover because he is a nonspouse beneficiary. The only remote option he has is returning the uncashed check (adding the withheld amount )to the plan administrator if he feels they made an error and did not provide any prior notice of their distribution. If he ignored any notifications or if he inherited through Dad’s estate, then there is no chance. In that case, all he can do is attempt to max out his workplace contributions if currently working to offset the tax impact of this distribution. I would think that IBM would have very competent plan administrators and that the distribution was probably handled correctly, but what went on between notifying the plan of father’s death and the date of distribution is not clear.