You are correct that the new law addresses only defined contribution
plans (such as 401k, 403bs, etc). The law did not address IRAs because
IRAs were already allowed to be converted into inheritance IRAs. The
new law is simply addressing 401ks which did not have that feature
previously.

Aaron

joetaxpayer wrote:
- quote -

Thanks Tad. Exactly what I needed.

--
.Bill.

Bill wrote:
- quote -

Bill,
The change in rules was for non-spouse beneficiaries of retirement plans
(such as a 401k or 403b), not IRAs. Under the old rules those
beneficiaries were forced to take a lump sum. Under the new rules they
can rollover the balance to an IRA, and take distributions over five
years, or over their life expectancy. This is primarily of benefit to
child-beneficiaries and, especially, domestic partners.

Unless I missed something that is very buried, the IRA is a beneficiary
IRA, meaning it can't be converted to a Roth IRA, and can't be combined
with any of the beneficiary's other IRAs.

For more info you might google: NONSPOUSE BENEFICIARY PENSION PROTECTION
ACT 2006.

-Tad

Bill wrote:

- quote -

The recent pension reform act addresses inheriting a non-spouses 401k,
but I don't believe the inherited IRA was addressed in this round of
reform. If anyone knows otherwise, they are bound to quickly set me
straight, and keep me honest.
JOE

Someone told me that a recent change to the tax code changed the rules
that apply to a non-spouse IRA beneficiary. The change, as it was
explained to me, is that the inherited IRA can now be combined with any
other IRA that the beneficiary has and that the RMD rules requiring the
beneficiary to withdraw funds from the inherited IRA no longer apply.
Sounds to good to be true.

I have not been able to find any reference to or information about this
change. Has anyone else heard of this and, if so, can someone point me
to an explanation of the change? Thanks.

--
.Bill.