Estate 60 Day IRA Rollover
Individual left Traditional IRA to Estate. Died after RMD had begun. Can the Estate receive funds and rollover to another institution within 60 days, similar to what living individuals are allowed to do?
Individual left Traditional IRA to Estate. Died after RMD had begun. Can the Estate receive funds and rollover to another institution within 60 days, similar to what living individuals are allowed to do?
Permalink Submitted by Alan - IRA critic on Tue, 2020-01-07 17:46
No. However, if the estate beneficiary is a surviving spouse, the spouse has been allowed to do a rollover to their own IRA in various IRS letter rulings. In other situations, a distribution to the estate will be taxable, either to the estate or passed through to the beneficiaries of the estate. If the beneficiary is not the spouse, the executor might have assigned the inherited IRA out of the estate to the beneficiary. This is not an IRA distribution. The beneficiary can then take RMDs and other amounts from the IRA. But once the IRA has been distributed, it will be taxable.
Permalink Submitted by Phil Harris on Tue, 2020-01-07 18:05
IF the estate chose to move an IRA account from one bank/custodian to another, can it do a “direct” transfer, but not the 60 day indirect variety?
Permalink Submitted by Alan - IRA critic on Tue, 2020-01-07 18:18
Yes, a direct transfer is OK as it is not a distribution and is not reported. Sometimes it is difficult to find a custodian who wants to accept an estate IRA, especially if the estate has many beneficiaries and the IRA balance is small.