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Posted by A.G. Kalman on July 19, 2007, 10:32 pm
Please log in for more thread options A.G. Kalman wrote:
> Rich Carreiro wrote:
>> A relative of mine has just inherited a share of a trad IRA
>> and a Roth IRA from her father. The IRAs listed her and her
>> sister as 50/50 beneficiaries.
>>
>> I'm trying to make sure my relative (the decedent's
>> daughter) doesn't get hosed on this...
>>
>> She's contacted her late father's financial advisor (who
>> works with American funds -- her dad's trad and Roth IRA
>> accounts are with American). The advisor is trying like heck
>> to discourage my relative from transferring her share of the
>> inherited IRA to an inherited IRA account at Fidelity (which
>> is where all her other investments are kept).
>>
>> Anyhow, after finally and politely getting the advisor to
>> admit defeat, he said she could do a "60-day rollover" to
>> get the money into the inherited IRA account at Fido. She
>> has NOT signed off on that yet.
>>
>> I am under th impression that this could not be done -- if a
>> check made payable to her is sent, it'll (a) all be taxable
>> income (except from the funds from the Roth), and (b) it
>> will not be able to be put back into inherited IRA accounts.
>> In other words, only a direct trustee-to-trustee transfer
>> will do the trick (which could involve a check, as long as
>> the check is made out to "Fidelity FBO [whatever]" and not
>> to my relative).
>>
>> Is my understanding correct?
>>
>> And if so, could you point to pubs/regs/IRC that states
>> this, so I can give that reference to my relative so she can
>> in turn quote it at the advisor.
> Sec. 829 of the Pension Protection Act of 2006 added Sec.
> 402(c)(11) to Title 26. See IRS Notice 2007-07 for details
> and a Q&A. A direct trustee to trustee transfer is required.
> Especially read Q&A 14 which states that a plan does not
> have to offer this option.
Whoops.... missed the point of inheriting an IRA rather
than a retirement plan. So... my answer is only correct if
one inherits a retirement plan. Then, a trustee to trustee
transfer is required to get the funds into an IRA.
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