"Fred J. Tydeman" <tydeman[at]tybor.com> wrote:
- quote -

Only one required distribution.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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Fred J. Tydeman wrote:

- quote -

Only the single minimum distribution (Dad's) though if it
wasn't taken before Dad died, it must be taken before year
end by whomever or (if payable to the estate) whatever is
the beneficiary (or beneficiaries).

--
Ed Zollars, CPA
Phoenix, Arizona

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Fred J. Tydeman wrote:
- quote -

Only one minimum distribution in the year of death, set by
the father's schedule. It doesn't matter to whom it was
distributed: the father, the father's estate*, or the
beneficiary.

* If the distribution was scheduled before his death, but
not actually distributed until after his death, it MAY be
taxable to the estate.

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"Fred" <fredt2[at]mail.com> wrote:

- quote -

Actually, no. A SIMPLE IRA is a whole different animal from
a traditional or Roth IRA. And, it's not that simple either.
You can read about them in IRS Pub 560.

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Fred wrote:

- quote -

Nope--a SIMPLE-IRA is another type of account, which is
actually subject to a more complex set of rules than an IRA
during life, though at death it's the same rules.

--
Ed Zollars, CPA
Phoenix, Arizona

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A. G. Kalman wrote:

- quote -

Very heavily <grin> . I believe that Dad would owe the 50%
tax on the failure to take minimum distributions for all
open years. The minimum distribution for the year of death
would need to be paid out before the end of the year or they
would owe that 50%.

--
Ed Zollars, CPA
Phoenix, Arizona

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Arthur L. Rubin wrote:

- quote -

The five year rule only applies if the decedent hadn't
already reached the required starting date for the minimum
distribution rules. This gentleman was 75, so if there is
no designated beneficiary, distributions can still continue
over Dad's remaining life expectancy.

--
Ed Zollars, CPA
Phoenix, Arizona

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Herb Smith wrote:
- quote -

Other beneficiaries can ask that the account be split into
subaccounts, but no contributions will ever be allowed.

- quote -

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"Ed Zollars, CPA" wrote:

- quote -

Assume he died in 2004. Must there be two minimum
distributions done in 2004? One for the father, and a
second for whomever inherits the IRA? Are either prorated
for the number of days the respective person owned the IRA?

---
Fred J. Tydeman Tydeman Consulting
tydeman[at]tybor.com Programming, testing, numerics
+1 (775) 287-5904 Vice-chair of J11 (ANSI "C")
Sample C99+FPCE tests: ftp://jump.net/pub/tybor/
Savers sleep well, investors eat well, spenders work forever.

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- quote -

Other than dealing with the penalties for the missed RMDs,
no difference.

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"Arthur L. Rubin" <ronnirubin[at]sprintmail.com> wrote:
- quote -

Are you mistaken? In this case, yes.

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Thanks guys. The more I dig into this IRA stuff the more
complicated it is. Didn't it used to be called a simple IRA?

Fred

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- quote -

A what if: What if there were named beneficiaries and the
decedent who was age 75 had never taken any RMDs. How is
the IRA taxed?

--
Alan
http://taxtopics.net

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Ed Zollars, CPA wrote:
- quote -

I thought that, if there isn't a "designated beneficiary",
the heirs must use the 5 year rule. Am I mistaken?

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"Fred" <fredt2[at]mail.com> wrote:

- quote -

Unless the IRA contained nondeductible contributions (an
8606 form would be in your father's tax records) all
withdrawals from the IRA are taxable to the person or
persons receiving the distribution. Taxes would be due at
their individual tax rates.

- quote -

Only the surviving spouse can rollover an inherited IRA. You
may be able to take distributions over your lifetime, five
years, or all at once - depending on the terms of the IRA.

- quote -

You may want to read up on distribution rules for an
inherited IRA in Pub 590, available at www.irs.gov

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I just spent a year trying to sort out the same type of
questions. 1) You need a good tax CPA. Was your father
taking distributions from the IRA will be the first
question.

2) You can't rollover into your personal IRA's. It will
become an inherited IRA kept separate. Logic has no basis in
this game. Depending upon if your father was taking
distributions yet or not will determine what must be done
with the monies.

3) Distributions will be taxed as regular income at your
normal tax rate. If you have to pay inheritance taxes, ask
your CPA about "Income with respect to decedent". This is a
very complicated tax item that few people know about but can
help reduce double taxation on the distributions.

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Fred wrote:

- quote -

First the easy question: No. 2 . the answer is no.

Now , you don't say who "we" are. Are you saying "we" are
all primary beneficiaries of the IRA accounts? or just some
of you are?

In any event, the beneficiaries are the ones faced with
possible taxation according to the terms of the IRA
agreement. And IF his estate was the only beneficiary,
then the IRA's are all suddenly taxable. OTOH, if
individuals are beneficiaries, they have a couple of
options, and best they discuss same with qualified local tax
help, either a CPA or EA (Enrolled Agent).

ChEAr$,
Harlan Lunsford, EA n LA

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"Fred" <fredt2[at]mail.com> wrote:

- quote -

Non spouses cannot roll an inherited IRA. Distributions
must begin I believe by the end of the year, and you need to
see who is inheriting the IRA. Distributions must be taken
every year and will be taxed to whomever is receiving them.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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Fred wrote:

- quote -

Yes, paid at the rates of the beneficiaries of the IRA who
are to receive the distributions. If the estate was the
beneficiary, there may be other problems.

- quote -

No, you cannot roll over the balance into your own IRAs.
However, you can continue his IRA account and take
distributions under the minimum distribution rules for
distributions following the date of death. Since your
father should have already taking required minimum
distributions, the option should be to take the distribution
over the life expectancy of the "designated beneficiary"
(special rule with special impact) or your father's
remaining life expectancy at the date of his death (a quirky
concept, I'll admit, but one that may be your only option if
the estate is the only beneficiary or in certain other
cases).

- quote -

A number of them that are best dealt with by a tax
professional you hire to help you handle this. The attorney
handling the estate may be able to help you with this, or
you might want to work with a CPA or EA to handle this. But
there are a couple of key deadlines.

You said your father died a "few months ago"--was a few
months ago before or after December 31, 2003? The first
issue is whether your father took his required minimum
distribution for the year in which he died. If he did, that
eliminates one deadline, but if not the amount needs to be
paid out to the beneficiary (or ies) prior to December 31 of
the year he died *OR* an excise tax equal to 50% of the
required distribution is due.

If he died in 2003 and didn't take the minimum distribution,
you already have a problem <grin> . A professional can help
you in this case, but it will need to be taken care of.

If he died in 2004, then your first deadline is December 31,
2004 if he hasn't taken the required minimum
distribution--so the first inquiry will need to be into
whether or not that distribution has been taken.

The other deadline takes place on September 30 of the year
following the year he died. That's the point at which the
"designated beneficiary" is determined and you may need to
take some action before that date if there are certain
"problematical" beneficiaries in the pool (such as a
charity) that could accelerate the payout. Again, a
competent professional who understands this area will be
able to work you through it.

Obviously, if he died in 2003 that deadline is coming up
here in the relatively near future.

--
Ed Zollars, CPA
Phoenix, Arizona

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Fred wrote:

- quote -

I'm no expert, but I believe the answers depend on a variety of details,
like how the decedent designated the beneficiaries with the investment
company. I'd suggest hiring an expert to look at the details of your
specific situation.

- quote -

If you don't need the proceeds right away, you might ask,
"How do I keep as much as possible in the IRA for as long as
possible in order to let it accumulate tax-deferred?"

I found the following book from http://www.nolo.com/
helpful: "IRAs, 401(k)s & Other Retirement Plans: Taking
Your Money Out" (Reading a book beats paying a lawyer by the
hour to explain the rules to you.)

If you're interested, be sure to get the latest edition.
(I'm not affiliated with Nolo Press.)

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