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Estate tax on rollover over IRA to non-spousal beneficiaries

  
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Subject Author Date
Estate tax on rollover over IRA to non-spousal beneficiaries susheth 12-22-2006
Posted by susheth on December 22, 2006, 1:33 am
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 The pension protection act of 2006 now allows non-spouse
beneficiaries to roll over assets inherited from a qualified
retirement plan into an IRA.

What are the estate tax implication if this IRA is rolled
over to a non-spousal beneficiary?

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Posted by Herb Smith on December 23, 2006, 1:28 am
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 susheth@gmail.com wrote:

> The pension protection act of 2006 now allows non-spouse
> beneficiaries to roll over assets inherited from a qualified
> retirement plan into an IRA.
>
> What are the estate tax implication if this IRA is rolled
> over to a non-spousal beneficiary?

None. The value of the IRA is included in the decedent's
estate regardless of who the beneficiary is.

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by joetaxpayer on December 23, 2006, 1:28 am
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susheth@gmail.com wrote:

> The pension protection act of 2006 now allows non-spouse
> beneficiaries to roll over assets inherited from a qualified
> retirement plan into an IRA.
>
> What are the estate tax implication if this IRA is rolled
> over to a non-spousal beneficiary?

No different than before, really.
Prior to this, a 401(k) could be inherited, but not not
rolled into an IRA if beneficiary was a non-spouse. This is
separate from the estate tax which would be paid by the
decedent's estate if over a certain amount. Any retirement
funds (except Roth IRA) are part of that estate.

JOE

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Jon Gallo on December 23, 2006, 1:28 am
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> The pension protection act of 2006 now allows non-spouse
> beneficiaries to roll over assets inherited from a qualified
> retirement plan into an IRA.
>
> What are the estate tax implication if this IRA is rolled
> over to a non-spousal beneficiary?

to estate tax like any other asset included in the taxable
estate. If you want the roll over to be effective, you need
to provide another source for the payment of estate tax
attributable to the qualified plan.

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

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