non-spouse inherited IRA; can some of account be taken in cash and balance transferred as a Trustee-to Trustee transfer?

[Guest jusducki]

two adult children inherited mother's IRA; she was not required to take RMD. The children need some cash for final expenses - can they take partial withdrawal as cash (yes, paying taxes, etc. on it) and transfer balance of their inheritance into non-spousal IRA via a Trustee to Trustee transfer? Thank you.

[Appleby]

All distributions that occur after the death of the IRA owner must be reported in the name and tax ID # of the beneficiary. The beneficiaries should first transfer the assets to their IRAs and then take distributions from those IRAs… Some financial institutions are able to distribute the assets from the same account- than was held by the deceased- while complying with the reporting requirements, i.e. reporting the distributions in the name and TIN of the beneficiary…semantics really…

[Lori Foresz]

Hi,

I was under the impression that non-spouse beneficiaries could not transfer inherited amounts to their own IRAs without the entire amount being treated as a taxable distribution at the time of the transfer. Has this changed?

Please let me know as I have a non-spouse beneficiary who wants to roll over an inherited IRA and I believe I need to tell her no.

Thanks for your help.

[Appleby]

Hi lgolgen,

This has not changed. A non-spouse beneficiary may not transfer inherited retirement assets to his/her own IRA.

“their IRAs” in the post above, should be “their inherited IRAs”…thanks for catching that.