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An entity has to be preapproved by the IRS in order to be an IRA custodian. The other parts of your message are both disturbing and confusing. If the account is held in the name of the beneficiary, then it has to already be an inherited account. You can't remove the beneficiary's name and replace with the custodian's. That sounds like the tort of "conversion" (not to be confused with Roth IRA conversion). What is your relationship? Are you the IRA owner? The beneficiary? The financial advisor?

Add the outstanding transfer to the IRA balance.

Sorry to disappoint, but IRAs are NOT judgement proof.

Just so there is no misunderstanding, if you have both traditional IRAs AND Roth IRAs, you do NOT need to withdraw all of the traditional IRAs in order to take a loss on the Roth IRAs. You would, as John pointed out, have to withdraw ALL of your ROTH IRAs in order to claim the loss on the Roth.

Usually, it belongs to the surviving beneficiary, unless there is a PER STIRPES clause on the beneficiary designation form. I truly doubt it would revert to the IRA holder's estate. In truth, either the IRA account agreement or state law will address this issue.

You have the legal ability to name anyone you want, especially if you are not married. However, since state laws vary, you may want to check with a local attorney to make sure you do it in a way that cannot be challenged by your relatives.

Age 59½ exception applies. No penalty.

John, The 1099R is correct; the custodian on an IRA will always put the total distribution in the taxable box. They should also check the "taxable amount not determined" box, but I never lose sleep over that. Because it is possible to have multiple Roth accounts, no custodian could possibly know if the distribution is a return of contributions, or income. As for Gemski, just enter the total amount on line 15a of form 1040 and put zero on line 15b. The distribution is not taxable, assuming you've never taken any other Roth distributions.

You can withdraw your annual contributions AT ANY TIME with NO penalty or tax. The rules are different for conversion amounts, and different again for what is referred to as account income.

Have you already done the conversion? If not, it's too late to do a 2004 conversion.

Actually, this PLR merely confirmed what a bunch of us had already thought, based upon a literal reading of the regs. Mbozek, I'm not aware of any PLR that allowed a post death transfer from a plan to an IRA by a non spouse bene. Can you give me the cite? Thanks.

Your question is somewhat confusing. An estate is an individual thing, generally. A survivor's IRA cannot fund a trust of a deceased individual. The I stands for Individual. If you need to deal with an IRA in the context of a large estate, I suggest you engage the services of an IRA expert. There is apparently a lot at stake here. Make sure you get it right.

Actually state law trumps the beneficiary designation. If state law allows the surviving spouse to have a certain percentage of the husband's assets, the IRA can be used to satisfy that obligation. The answer is to speak to a qualified attorney.

My 2 cents... MBozek is correct.

You have to define what you mean by "transfer". If you mean moving the assets from inside the IRA to the trust itself, that would be taxable, but that probably is also a bad move. If, however, you mean transferring title on the account from the decedent's IRA to a beneficiary IRA in the name of the trust as beneficiary of the decedent's IRA (You have to be careful how the account is titled), that is not a taxable transfer. Nor is it taxable if the account is retitled as a beneficiary IRA for a trust beneficiary, if that is what is going to happen under the trust agreement. I suggest you consult with a knowledgeable pro, before you take any action. Mistakes in this arena at this time would be irreversible.

Maybe the attorney should have read the regulations which requires the payment to the beneficiary on a term certain period, NOT a recalculated life expectancy. Sounds like maybe the attorney should not be preparing beneficiary designation forms.

Carl, Understand that if you miss the 60 days for some reason, you will be taxed and penalized on the distribution. While the IRS has the power to waive the 60 day requirement and allow a late rollover, they have declined to do so in your circumstance. So make sure you know what you are doing. Too many times an individual takes the so called 60-day loan in anticipation of money coming in (e.g. closing on sale of real property) only to have a delay force the missing of the 60 day deadline. In that case, it's too bad. You do this at your own risk.

The answer is yes, but they will NOT be able to use their own life expectancies for withdrawals.

My first reaction from your example is where do you get $20,000 of deductions FOR MAGI. There are not a lot of deductions that fit in that category. If you're thinking of itemized deductions, you're way off base. My second reaction is, why not just borrow the money for expenses for one year, do the conversion, and take a double withdrawal the second year and pay off the loan. But to answer you simple question, as long as all taxable income is reported, any method used to keep taxable MAGI under $100K is permitted.

People, you're missing an important component of Roth IRAs. Income from a Roth is NOT tax free if used for college tuition. It is only penalty free. You have to be over 59½ (or dead/disabled) to get income out of a Roth tax free. The only other exception for tax free income from a Roth is for first time home purchase.

You will be probably have to get a private letter ruling to do so. Whether or not you will get the ruling will most likely depend upon whether you can show that it was the intention of the decedent to do the rollover.

As John stated, you can convert any IRA you have into a Roth, in whole or in part, in any year that you meet the income limitations. There is no limitation on how many conversions you can do, except for limitations on converting the same money if you were to recharacterize a conversion. Understand that if you have retirement money that is not in an IRA, it would have to moved into an IRA first, before conversion.

I worked extensively with Roth IRAs, and I can't imagine why you would not contribute directly to the Roth. Why don't you share that with us first. If you have some angle I haven't thought of, I'll thank you. On the other hand, if you are operating under some misconception, we can explain that to you.

The "cost value" has no relevancy, since upon distribution from the IRA the recipient will have ordinary income. IF there is after tax money in the qualified plan, then that amount becomes (additional) basis in the IRA. Under the tax rules, any non taxable transfer, such as from a qualified plan to an IRA, will generally NOT result in any step up in basis.

Clearly this is new ground here, and I am not comfortable even with the idea of transferring the IRA incident to the divorce, since it is a beneficiary IRA. My advice is not to do anything without the security of a private letter ruling from the IRS. If the IRS takes the position that the spouse had no right to the IRA as a matter of law, and only received it in trade of another asset, they might argue that it immediately becomes taxable to the beneficiary. To me, it's too risky a move to make without knowing exactly what the IRS thinks.