Non-spouse splitting inherited IRA from 2015
A non-spouse beneficiary is wanting to transfer a portion of his Inherited IRA to a newly established Inherited IRA at an online brokerage firm for his own day trading purposes (and we all know how that will end). Anyway, is it even allowed to split off a portion of a non-spouse Inherited IRA to transfer into the same at another custodian to avoid taxes? And if so, will this subject the Inherited IRA to post-SECURE Act rules since it was originally established in 2015? Thank you.
Permalink Submitted by Alan - IRA critic on Sat, 2023-01-14 20:23
While rare, a portion of an inherited IRA could be transferred directly to a new custodian or even to a new account at the same custodian. However, no taxes will be saved. The total inherited IRA RMD will remain the same, but the beneficiary could aggregate the total RMD in any combination between the two accounts since they were inherited from the same decedent. If beneficiary later on tires of the day trading, the new inherited IRA could then be transferred back into the original account. These are all non reportable transfers.