IRA Update From Ed Slott

June 29, 2005

IRS Issues IRA Disclaimer Ruling

Revenue Ruling 2005-36

The IRS has released Revenue Ruling 2005-36 which concludes that a beneficiary may disclaim an IRA, even after taking the required minimum distribution (RMD) due for the year of the account owner’s death. This changes everything you know about disclaimers where you can't touch the property before disclaiming. Because this is a Revenue Ruling and not a Private Letter Ruling, this ruling applies to all IRA beneficiaries. For this reason, Revenue Rulings are rare in the IRA world.

The revenue ruling reinforces the fact that the RMD of a deceased account owner must be distributed for the year of death as is stated in the IRA final distribution regulations released in 2002. It also states that a disclaimer may be done for all or a part of the IRA and states that the RMD from the year of death goes to the beneficiary, not to the spouse (unless they are the beneficiary) or the estate of the account owner.

More details will be provided in the August 2005 issue of “Ed Slott’s IRA Advisor” newsletter. 

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