Roth Conversion via Spousal Rollover

[Guest reg_h2b]

Spouse bene of the Decedent's traditional IRA. Can the spouse rollover and convert the decedent's IRA directly to HER Roth IRA without first rolling decedent's IRA into HER traditional IRA?

Custodian says it's OK. Can't find it in Pub. 590. My concern is that if one needed to recharacterize where would it go?

Thanks,

Reg Jones

[txdd]

It is my understanding that a spouse may treat an inherited IRA as his or her own so I think it would be OK for the Roth conversion to be directly from the inherited IRA (now considered the spouse's own). If the conversion were to be recharacterized, the finds would simply go into an IRA belonging to the spouse, never back to inherited status.

[Appleby]

txdd is right.

You will not find it worded as such in IRS publication 590 and you may even get two different responses from two different IRA custodians... here’s why.

First, the spouse must be treating the IRA as her own in order to convert the assets to a Roth IRA.

The key is that the entire Roth conversion must be reported in the name and tax ID number of the spouse beneficiary, i.e. the distribution from the traditional IRA and the credit (contribution) to the Roth IRA.

Some custodians are able to effect this requirement for the distribution by distributing the assets from what was once the deceased’s IRA. Other are not and will require that the spouse establish an IRA in his/her name and tax ID number, to which the assets from the deceased’s IRA will be credited. The conversion will then be done from this account.

[Guest reg_h2b]

Thanks to all,

We played it safe and did a direct rollover into the sps's TIRA then converted to sps's RIRA.

Reg