Survivor RMD/Rollover Issue
Decedent spouse died in 2008. Would have turned 70 1/2 next month.
401K is still in his name. 65 year old survivor is finally
moving forward and has received paperwork about 1st required distribution.
Do I have this correct?:
1. If she puts 401k $$ in her name before next month, she is owner
and there in no RMD.
2. If she is delayed beyond next month and 401K remains in HIS name, she has to take distribution for husband
but she can still rollover remainder as her own. That is, the genie is still in the bottle.
So, although I’ve read that a spousal rollover can be done at anytime, I am not sure if
it can be done after she has started receiving an RMD as a beneficiary.
Many Thanks.
Chip Simon
Permalink Submitted by mk foss on Sat, 2011-03-19 19:37
A spouse-beneficiary has until December 31 of the year the decedent reaches 70-1/2 to take the first RMD. If the benefit is rolled to an IRA before 12/31/11 she’s in the same situation as if she rolled it over next month.
A spouse can do a rollover at any time whether or not the original owner of the account was taking RMDs or not. The only restriction is that the spouse must do it, an executor for the spouse cannot.
Permalink Submitted by Alan Spross on Sun, 2011-03-20 19:02
With respect to the 2011 RMD, the IRS Reg that appears to allow no RMD to apply to any 2011 distributions or rollovers is grounded in Qs 3 and 6 of the att’d IRS Reg:
http://www.taxalmanac.org/index.php/Treasury_Regulations,_Subchapter_A,_…(a)(9)-3
But rather than argue with the plan over the RMD issue, it may be easier to allow them to distribute it and then the surviving spouse can roll it over herself since it technically is not an RMD. This concept is confusing when you consider that if the plan remained intact and no distribution was taken in 2011, the RMD would be delinquent as of 12/31/2011.