KJohnson Posted December 1, 1999 Posted December 1, 1999 In 1983 Participant makes a TEFRA 242(B)(2) election to defer distribution until retirement and to take a lump sum at that time. Participant is now in his mid-80s and is retiring. How much of the distribution can be rolled over into an IRA? All? The balance minus what he would have had to take but/for the TEFRA 242(B)(2) election? Any cites on this? [This message has been edited by KJohnson (edited 12-01-1999).]
KJohnson Posted December 2, 1999 Author Posted December 2, 1999 Someone must have had experience with this in the last few years.
Guest Posted December 2, 1999 Posted December 2, 1999 Our view is that the amount not eligible for rollover is the sum of the minimum distributions that would have been paid had the TEFRA election not been in place. There is no direct authority for this but it is consistent with the way the proposed regs treat revocations of TEFRA elections (i.e., there must be a "catch-up" of the MRDs that would have been made when the election is revoked).
KJohnson Posted December 2, 1999 Author Posted December 2, 1999 Thanks Harry O. I looked for PLRs but could find none on this issue. IRS does seem to take a fairly strict view on construction of TEFRA elections. As a follow up, I saw one PLR which indicated that if a beneficiary was not designated in the TEFRA election then the entire election was invalid. Another PLR seemed to indicate that you look at the election separately for the participant and beneficiary. Election could be o.k. for participant and not o.k. for beneficiary in which case you simply distribute death benefits in accordance with 401(a)(9). This seems to make more sense. Again, anybody have experience with this?
Recommended Posts
Archived
This topic is now archived and is closed to further replies.