Beneficial IRA distributions

[Guest Denise Murphy]

Husband-owner, wife primary beneficiary; husband dies and wife takes the check (constructive recpt) out of the dec. husbands IRA (dth distrib). She cashes the check. A week later walks the check over to another investment provider and wants to open a beneficial IRA and would like to now rollover the dollars. (CPA suggested this transaction) Can the spouse rollover beneficial dollars? Yes, it would be a better transfaction to move money from a beneficial IRA to a beneficial IRA as a transfer, but the client has already cashed the check.

[BPickerCPA]

A spouse is the only beneficiary that can do a rollover, so it looks like you're ok.

[Guest cmarshall]

I would agree that a spouse beneficiary can roll the funds over into an IRA. However, the spouse beneficiary would need to roll the funds into her own IRA, the spouse could not roll the funds into a "beneficiary" IRA because she had constructive receipt of the funds from the decedent's IRA.

[BPickerCPA]

[[i would agree that a spouse beneficiary can roll the funds over into an IRA. However, the spouse beneficiary would need to roll the funds into her own IRA, the spouse could not roll the funds into a "beneficiary" IRA because she had constructive receipt of the funds from the decedent's IRA.]]

According to Sec 408(d)(3), an inherited account, which is not eligible for rollover, excludes an account inherited by a spouse. It does not state that the spouse has to treat the account as her own. Therefore, a spouse can do a rollover and still be a beneficiary, at least according to my reading.