Advanced Underwriting Consultants

Question of the Day – April 12

Ask the Experts!

Here’s the question of the day.

Question: I am working with a widow whose husband passed away, leaving his estate as beneficiary of his IRA.  The surviving wife is the sole beneficiary of the estate.  Can she roll over the IRA to her own account?

Answer: According to a recent private letter ruling, the answer is yes.

In Private Letter Ruling 201211034, the IRS dealt with a situation where the decedent’s estate was the beneficiary of an IRA, and the surviving spouse was the sole heir of the decedent.  In the PLR, the IRS decided that the surviving spouse may

(1)    by means of a trustee-to-trustee transfer, transfer the proceeds from the original IRA into an new IRA established and maintained in the spouse’s name; or

(2)    take a distribution from the original IRA and roll over the proceeds into a new IRA in the surviving spouse’s under the 60 day rollover rules.

Even though a private letter ruling can’t be relied on as final law, it does indicate how the IRS looks at the particular tax issue involved.

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