Estate Inherited IRA Rules, What is the IRS Code for transfer to Inherited IRA FBO Beneficiary when Estate closes?



If you are referring to the 1099R distribution code, there is no 1099R when the executor assigns the inherited IRA out of the estate to the estate beneficiaries since this is not a distribution out of the IRA.



Looking for IRS code showing that the Estate Inherited IRA “can” transfer into Inherited IRA FBO Beneficiary when Estate closes.  I’ve received conflicting information regarding this.



  • This has been routine for years, so there is no reason for an IRA custodian or advisor to still be challenging this. Refer to IRS PLR 2002-34019. It is not in the tax code. Likewise, a trustee of a trust can also assign an inherited IRA out of the trust to the trust beneficiaries if the trust provisions allow. What cannot be done is a direct rollover from a qualified plan to an inherited IRA when the estate inherits the qualified plan.
  • https://irahelp.com/slottreport/what-happens-when-estate-inherits-ira
  • If an executor encounters an obstructive IRA Custodian, they should make it totally clear that NO distribution is made. That will provide time to find a cooperative custodian and the estate inherited IRA can then be transferred to that custodian. That said, an inherited IRA is a wasting asset and possibly litigation prone, so most custodians do not find them attractive. Rather than indicating that refusal is simply their policy, they suggest that the IRS has issues with assignment. The IRA clearly has NO such issues.


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