Appleby

Here is a thread TL;DR

The Roth was created as a conversion from a traditional IRA in 2010 so it was formed more than 5 years ago. Spouse is designated income beneficiary of the trust for the rest of her life, and then his children and grandchildren become the income beneficiary. The corpus of the trust will be distributed when the children/grandchildren attain a certain age. If he dies now, is the spouse required to fully distribute the Roth IRA by the end of the required 10 years period? If the spouse dies before the 10 year period will the children/grandchildren be required to distribute the remaining balance of the Roth IRA within 10 years of the Roth owners death? What is his objective for naming a trust as beneficiary, instead of her? Can his goal be accomplished by naming her as the beneficiary, instead of the trust? If he names her as beneficiary, she could move it to her own Roth IRA , where RMDs would not apply, and name her children/grandchildren as beneficiaries. If he names the trust as beneficiary, whether the 10-year rule applies, or the life expectancy rule ( over her single life expectancy) depends on trust language. Depending on the type of trust, either of the following could apply: The 5-year rule the 10-year rule A choice between the 10-year rule and the life expectancy rule. The trust attorney must review the trust to determine whether it meets the requirements that would meet his desired goal and objectives.

It appears you are looking for someone with expertise in prohibited transactions? You might not find an expert with a banner that says 'experience with solo 401ks' . Look for an expert that audits qualified plans- period, as that would cover SoloK plans. Or an expert in self-directed accounts. The rules are not different for SoloK plans. Good luck!

The 2024 RMD would be the decedent's (the IRA owner) RMD. The waiver does not apply to the IRA owner. And it does not apply to beneficiaries who are not subject to the 10-year rule.

I don't have a cite handy. But you are right. Otherwise, participants could bypass the triggering event requirements via an in-plan conversion.

What type of account is it? With some types of plans, you are the beneficiary by default, unless you signed away your right to be the beneficiary. And, there are some that allows the account owner to name a beneficiary other than you, if they want to. The beneficiary form might have information that tells you the type of account. The most recent beneficiary form they have on file is that one that counts, unless it is overridden by the terms of the plan.. If you are not the beneficiary, they will not/cannot share information with you about the plan/account. Your financial advisor should be able to help. A good place to start is a conference call (with you and your advisor) to the plan administrator.

The 10% penalty no longer applies. SECURE Act 2

A return of excess is the only way for the 'correction' to be done on the IRA side.

The IRA 12/31/24 balance must be increased by the rollover amount. whoever does the RMD calculation must increase the 12/31/24 fair market value by any such rollover that is not in the IRA by 12/31/24

This is an easy fix. If you talk to someone at the bank that works with IRAs, they should be able to fix it quickly and easily. Depending on who you connect with, it can get hairy- but it shouldn't if you get to the right person.

You are right. Her election to move it to her own IRA in 2023 is effective 2023. Therefore, the only RMD that she needs to take is his, if he did not take it.

No. That is not OK. Those beneficiary accounts must be kept separately- particularly because the RMD calculations are different, and because that is the regulatory requirement. His wife should have two IRAs. (1) A beneficiary IRA for the one he inherited from his father. Registered in her name and her husband's name. (2) An IRA with the amount she inherited from her husband's own IRA. She can move this to her own IRA, or to a beneficiary registered in her name and her husband's name.-her advisor should advise which of the two is more suitable for her. His niece should also have two IRAs. (1) A beneficiary IRA for the one he inherited from his father. Registered in her name and her uncle's name. (2) A beneficiary IRA for the amount he had in his own IRA- that too should be registered in her name and her uncle's name. They should contact the IRA custodian and have them fix these errors.

No. Wife cannot roll the funds to her own IRA, because she is not a "spouse" beneficiary No. She must use her husband's life expectancy. No. She is not a designated beneficiary. She must continue distributions over her husband's life expectancy . And, she must fully distribute the inherited IRA no later than 10-years after her husband's death.

The IRA custodian does not and is not required to track basis ( after-tax) amounts. Therefore, the custodian must report it as a taxable distribution, but check the 'taxable amount not determined ' box. The tax-preparer must then file IRS Form 8606 to show how much of a distribution is taxable vs nontaxable. Generally, the distribution would include a pro-rated amount of pre-tax and after amounts- based on the aggregate balance of all the individual's traditional IRAs, SEP IRAs and SIMPLE IRAs.

Agree. Further, the RMD is not eligible for rollover, and under the RMD is included in first distribution rule, it appears that the RMD must be taken before the in-plan conversion. So, yes, the RMD would be based on the full 12/31/2023 balance' If he did not take the RMD before the in-plan conversion, don't we have an ineligible rollover to the DRA (of the RMD amount)?

What causes the designation invalid? The answer might allow for a more definitive response. Technically, this would not be a 'successor ' beneficiary, right? A successor beneficiary is one that inherits the account, when the primary beneficiary dies. If the primary beneficiary is invalidated, wouldn't the contingent beneficiary get promoted to primary? - unless the plan document says otherwise?

If the funds did not leave the plan, a corrected 1099-R should be issued for zero$, to overlay the incorrect 1099-R. What do you mean by? Are you saying it was rolled over to an IRA or other employer plan? Because, if it was rolled over, a 1099-R should be issued.

This does not apply to her, because she is an eligible designated beneficiary.

Technically, when you have an RMD, your first distribution includes your RMD until your RMD is satisfied. And RMDs cannot be rolled over. Agree with your second paragraph.

You are welcome. They have to be the same beneficiary. For example, Sally may aggregate RMD for two inherited traditional IRAs if she inherited both IRAs from Tom. Sally cannot aggregate RMDs with Tom's other beneficiary. I hope I understood your question.

If the owner died in 2020, 2021, or 2022 ( and died on/after their RBD), and the beneficiaries are designated beneficiaries ( who are not eligible designated beneficiaries ), the excise tax is automatically waived for 2021, 2022, and 2023. I can't advise. But, if you do decide to seek a PLR, you would have the rest of the year to decide ( if the owner died in 2020, 2021, or 2022 and died on/after their RBD, because the excise tax would have been automatically waived for 2021, 2022, and 2023)

RMDs for Beneficiary traditional IRAs can be aggregated , if inherited from the same decedent (original owner). Like the RMD rules for owner IRAs, the RMDs must be calculated separately, but the total can be taken from one or more of the multiple beneficiary IRAs.

Congratulations on your retirement. Best wishes to you as well.

You would be right, if the 5-year period had been met for the 401(k). But in this case, it hasn't , right? "Before he reached the 5 year aging rule he dies". That would mean the rollover is from a non-qualified distributions. In such cases, the entire rolled over amount is not basis. Instead, the rolled over amount is split - with the basis going into the basis bucket of the Roth IRA and the earnings going to the earnings bucket of the Roth IRA.

Hi Luke- yes. But, if the spouse already had a Roth IRA, the first Roth IRA starts the 5-year period for a qualified distribution,