Inherited IRA small balance after 90 days
My mother in law passed away, she had an IRA account. All funds were transferred well before 90 days to a beneficiary IRA.
A balance of less than a dollar is in the old IRA account from interest on a cash balance, now after the 90 day limit.
After transferring out that balance, is there any penalty or other tax issues?
Permalink Submitted by Alan - IRA critic on Mon, 2023-02-06 00:46
There is no 90 day limit, nor any other time limit for establishing a beneficiary RMD, but the sooner the better. If a late dividend or interest deposit is posted to the old owner’s account, it should be transferred automatically to the beneficiary IRA, or if this does not occur a request to transfer it should be made to the IRA custodian. The original account usually remains under the decedent’s SSN with the beneficiary’s SSN on the inherited IRA. Therefore, a distribution directly from the original IRA should only be made if the custodian will report it under the beneficiary’s SSN, and the custodian accounting will likely not accomodate that. There are no penalty or tax issues for transferring this money to the inherited IRA.