"A.G. Kalman" <glendale202-mtm[at]yahoo.com> wrote:

- quote -

You are correct that the spouse cannot be treated as the
owner, and cannot make any contributions to the account.
Keep in mind that as long as the deceased husband would not
have attained age 70½ had he lived, there are no required
beneficiary distributions to the spouse.

Barry Picker, CPA/PFS, CFP

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Barry Picker wrote:
- quote -

I haven't read the PLR but I must presume that this only
works as long as a surviving spouse does not treat the IRA
as their own IRA. I.e., one can take penalty free
withdrawals as long as one treats oneself as a beneficiary
rather than as a surviving spouse treating the IRA as their
own IRA.

I only bring this up as the survivng spouse does not have to
change the title to be treated as the owner. If the
survivor makes a contribution then they are the owner and
penalty free withdrawals would require the "new" owner to be
59 1/2. If the surviving spouse fails to take a mandatory
distribution as a beneficiary then they are considered to be
the owner.

--
Alan
http://taxtopics.net

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Arthur L. Rubin wrote:

- quote -

I don't have an "official" answer for that. But, as a
practical matter, I wonder if you might be stuck with the
situation as it sits as of the end of the year following the
year of death ??? If you have done "nothing," I would expect
there to be a default treatment. If you have done
"something," that might be the deadline for changing your
mind.

MTW

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

- quote -

A surviving spouse may leave the IRA as an inherited IRA and
take penalty free withdrawals, and then later (at age 59½)
roll it into their own name. There was a PLR on this exact
fact pattern.

Barry Picker, CPA/PFS, CFP

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Arthur L. Rubin wrote:

- quote -

If an inherited IRA from deceased spouse, then he should
roll it over into his own IRA. Step one. then he's free
to roll it over again into a Roth with concomitant taxes.
Step two.

ChEAr$,
Harlan Lunsford, EA n LA
Sat, 13 Nov 2004 18:38:56

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- quote -

....

- quote -

....

- quote -

That brings up a question that I would normally be too
embarrassed to ask. (Actually, I suspect the answer is in
pub 590 SOMEWHERE, but I can't find it at the moment.) If
OP had inherited an IRA from someone OTHER than a spouse,
there might be minimum distributions, but no early
distribution penalty. If from a spouse, when does the
surviving spouse have to choose the distribution form.
Could he leave the money in a (non-spousal) inherited IRA,
rather than rolling it over to his own IRA? Could he LATER
roll it over to his own IRA?

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Jim Beaver wrote:

- quote -

First of all, we have to know who was the beneficiary of her
IRA. this fact will determine what the beneficiary, not
necessarily you, may do with it.

(balance snipped.)

Assuming YOU are the beneficiary (the usual case), then you
may roll it over into an IRA of your own. And without other
information as to your financial and tax, one can't say
whether or not to roll over into a Roth IRA. Sometimes
it's better to wait and see.

ChEAr$,
Harlan Lunsford, EA n LA
Tue, 9 Nov 2004 18:08:01

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"Jim Beaver" <jumblejim[at]prodigy.spam> wrote:

- quote -

No. One never rolls an IRA into a Roth, particularly so an
inherited IRA. You might treat the IRA as your own and look
into converting to a Roth, but for the same reason you
cannot contribute, you might not be able to convert.

- quote -

Sure.

- quote -

Taxable.

- quote -

You cannot roll it over unless you treat the IRA as your
own, which it is not until you make the election to do so.

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

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- quote -

You have our sympathy on your loss, Jim.

You may roll over your wife's IRA into your own traditional
IRA. You may opt to roll it into a ROTH but you'd have to
pay the tax on that kind of rollover. You may roll over part
of it into a Roth and part into a Traditional IRA or you may
take a distribution of X amount of dollars (paying tax on
it) and rolling the balance over into an IRA of your own.

One caveat, if you roll into an IRA of your own, and later
take distributions before you are 59 & 1/2, you'll be
subject to a penalty tax of 10% unless an exception can be
applied. If you were take a total distribution NOW from
your wife's plan, the exception for death applies. In that
case, you'd pay the tax but there is no penalty tax to pay.

If you roll the funds into a ROTH, paying the tax, you'd be
able to take distributions of the contributions without tax
or penalty. After 5 years, you'd be able to take the funds
(contributions and accumulations) without having to pay
either tax or penalty tax on accumulations in that account.

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

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im Beaver wrote:

- quote -

You have the same options available to a surviving spouse as
if this was an IRA. This is all spelled out in IRS Pub 590
under inherited IRAs. Basically, you can treat it as your
own IRA by having the trustee modify the ownership; you can
roll it over into your own IRA; you can take a distribution.
The first two options avoid tax. Any distribtion is
taxable. As a beneficiary, there would not be any early
distribution penalty if you took the cash. Once you are the
owner or you rolled it into your own IRA, you can convert
any part of it to a Roth IRA.

--
Alan
http://taxtopics.net

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My wife died earlier this year, leaving a SEP-IRA account of
about $47,000.00.

I have a Roth IRA, which I rarely contribute to because our
joint income has traditionally been too high for me to make
contributions. I have a pension plan through my union, as
well. (I am 54 years old.)

What are my options for dealing with my late wife's SEP-IRA?

May I roll it over into my own Roth?

May I take all or part of the account value in cash?

What are the tax ramifications of taking the cash
distribution, if that is an option?

Can I roll part of it over and take part as a distribution?

Thank you.

Jim Beaver

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