Spouse Inheriting AND Assuming Ownership Of Husbands ROTH IRA
Will the spouse inheriting her husbands ROTH IRA and assuming it as her own be required to take distributions? If so on what basis?
No rollover issues since assumption of ownership is not a distribution and does not trigger a 1099R. Otherwise, if an actual distribution is made, only one such distribution is allowed to be rolled over via a 60 day rollover within a 12 month period, and a beneficiary distribution reported under the surviving spouse’s SSN is treated the same as if the surviving spouse did a rollover between any of their owned IRA accounts. Therefore, in this situation the surviving spouse needs to elect to assume ownership without receiving a distribution. Unfortunately, few custodians warn taxpayers about these rules and the potential loss of the rollover option.
Permalink Submitted by Alan - IRA critic on Fri, 2023-05-05 03:41
No RMDs are required if the spouse rolls it over or elects to assume ownership of the Roth. However, if the Roth is maintained in beneficiary form, the surviving spouse will be required to either take annual RMDs or could elect the 10 year rule. When the surviving spouse elects ownership, the holding period is the longer of the deceased spouse or the surviving spouse, if the surviving spouse had a prior Roth IRA.
Permalink Submitted by Herm Brames on Fri, 2023-05-05 16:06
Thank you Alan. If the deceased spouse had Qualified ROTH’s at 4 different financial firms, does the surviving spouse electing to assume ownership of all need to be concerned about rollover issues since the action will be “asssuming ownership” versus rollover.