Minor Inherited IRA with Loan

Submitted by Matthew Strajack on Thu, 2007-12-27 20:44

I have a client that passed away in 2007. His children (one of legal age / one a minor) are the bene’s on his company 401k. He also had a loan outstanding. How will this affect if we try to rollover the assets to an inherited IRA ? Will this make it a taxable distribution and any implications ?

Thanks



Submitted by Denise Appleby on Tue, 2008-01-01 16:13

The loan cannot- and should not- be rolled over to the IRA.
The loan should be treated as a distribution to the decedent , and the children can rollover the remaining balance to their IRAs.



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