"Barry Picker" <bpickercpa[at]mindspring.com> wrote:

- quote -

The other accounts have been split; e.g., account A in my
mother's name has been split into A1 in my mother's name,
"FBO me", and A2 in my mother's name, "FBO my brother".
Account B, similarly. Account C, the problem one, is still
in my mother's name only.

Would you have a reference (a form, tax instructions, or tax
code section) that indicates that calculating the LED for
account C, and distributing that amount from the beneficiary
Roth IRAs (probably half from A1 and half from A2) will be
satisfactory, considering the naming on the accounts is
slightly different? If that'll do it, I'll do it. If it may
not satisfy the IRS to let us preserve the LED on that
account, I'd like to re-exhort the people at C's brokerage
to finalize things.

Or consider this scenario, which obviates the question
above. The account is split in January into beneficiary
Roth IRAs C1 and C2 and we can take out distributions then
-- internal processes for brokerage of account C won't let
us take distributions out of account C directly, only out of
C1 and C2. Assuming there were no other inherited Roth IRAs
from which to draw, could we take the LED for 2003
half-and-half from C1 and C2 in Jan 2004, pay (and request
waivers for) the excise penalties, and preserve the LED
option?

If we can do this, then we could wait until the accounts are
established, which would be easier than haranguing the
brokerage daily. Or *must* the first distribution be taken
out by 2003 to preserve the LED option? I ask this question
because it'll trivially cover the case if there are other
Roth IRAs without having to answer the account naming
question above, and give me another backup option.

- quote -

I think at this point it will be cleared, the account may
just not be split in time for us to each receive our shares
before January (in which case life expectancy calculations
from that account's balances will be based on my (older
brother by 1 year)'s life expectancy, which is fine).

Thanks very much for your help.

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"Krishna Sethuraman" <krishgoo[at]wapacut.com> wrote:

- quote -

As long as there are other Roth IRAs inherited from the same
decedent, you can take a distribution from one account to
cover the other account. It sounds like you're in luck. So
take extra from the other Roth IRA to cover you.

Understand, that if the beneficiary situation cannot be
cleared, and you're stuck with the five year rule on the
account in question, your taking extra from the other Roth
IRA will not have helped you, but it's worth the shot.

Barry Picker, CPA/PFS, CFP

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(Note: LED = 'life expectancy distribution', the
distribution that must be taken yearly over our life
expectancies if we choose this option instead of depleting
the account over five years. EOCY = End of calendar year).

My brother and I inherited multiple Roth IRAs from my
mother, who passed away in 2002. One of the brokerages is
still in the process of clearing up beneficiary information
on one of the Roth IRAs (and as such, that Roth IRA is not
yet inherited by us). I'm almost positive my brother and I
are named as beneficiaries on this IRA, but in case it takes
until January for the brokerage to find the paperwork,
determine that we were the beneficiaries all along, and
split the account into two, we will not be able to take out
the first (2003) LED before EOCY 2003.

In this event, may we take out the 2003 LED in January 2004
and bite the 50% excise tax, to allow us to preserve the
life-expectancy-distribution option? Or are we prevented
from using the lifetime distribution option unless the
account is split before December 31, 2003? Or (and I doubt
this) can we take out extra from the other Roth IRAs to
avoid the excise tax?

I'm hoping to get this situation resolved in the next day or
two (I've been in touch with the head of the retirement
department at that brokerage) and things handled before
EOCY, but if things are delayed on their end, I wanted to
double-check my options.

Any help would be greatly appreciated, and I've learned the
lesson to pass on to friends that these things need to be
started in March, at the latest in June, of the year after
death to provide a proper margin of time for completion.

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