Required Minimum Distributions Following Death

[Guest Patrick Reynolds]

I have a question concerning MRD for a 401(k) and an IRA.

Husband and Wife are both past age 70 1/2 and Husband has been taking MRDs out of his 401(k) plan. Husband dies in March of 2000 and Wife does a spousal rollover to a new IRA with her daughter as DB. Wife then dies in October of 2000. 1. Is there an MRD from Husband's 401(k) in 2000?

2. Based on some Private Letter Rulings I've read, I believe that Wife, if she had survived, would not have to take an MRD until December 31, 2001. Is that correct and is there an MRD from Wife's new IRA in 2001?

3. What distribution rules apply to Daughter and what distribtuion must she take in 2001?

Thanks.

[BPickerCPA]

The wife should have made sure that the MRD was taken from the 401(k) before it was rolled over into her own IRA. Otherwise she has an excess contribution to an IRA since a required distribution is not eligible for a rollover.

Having rolled it over and then died prior to the new required beginning date for the rollover IRA (which I'm assuming was rolled into a brand new IRA, not her existing one), the daughter takes distributions based upon death prior to the RBD, which means five year rule unless she takes a distribution in 2001 and thus elects into the lifetime payout.

Barry

[Guest Patrick Reynolds]

Thanks for the help. Does that fact that the Wife was past 70 1/2 when she rolled over the Husband's 401(k) have any effect on the distribution rules applicable to the Wife's DB?

[BPickerCPA]

Not really. Distributions have to start in the year after the rollover, and the rollover should be to a brand new IRA, not an existing one.