Mark Carlow <Mark.Carlowr[at]gmail.com> wrote:

- quote -

Would the other IRC allowed choices for non-spouse
beneficiaries (lump-sum and 5-year accumulation then
lump-sum) also be available for trust beneficiaries?

-HW "Skip" Weldon
Columbia, SC

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Thank you all. I KNEW someone would have the site and cite.
I will reassure my client that there are ways of handling
it. He tried an IRS office in northern California and was
told "find the IRS regulation and follow it to the letter
and no one will know how to argue with it". Great help.
Except that now I've got the regulation.........

Nan, EA in LA

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Nan, EA in LA wrote:

- quote -

If various requirements are met, it MIGHT be possible to
treat the trust's beneficiaries as the IRA's beneficiaries.
See Reg. 1.401(a)(9)-4, questions 5 and 6.

MTW

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"Nan, EA in LA" <naneklund[at]aol.com> wrote:

- quote -

There's an excellent article on this precise subject in the
December 2005 issue of The Tax Magazine which I read via
CCH's Tax Research Network. Here are the first two
sentences, which can be posted here under the "Fair Use
Doctrine":

"On September 16, 2005, the IRS released LTR 200537044,6
which provided additional guidance regarding trusts being
named as beneficiaries of IRAs. Perhaps the most important
ruling of this LTR is that it clarified that, if a
beneficiary designation form names separate shares for each
individual beneficiary of a trust, then each trust
beneficiary's life expectancy can be used for purposes of
determining the required minimum distributions. . . .

The author is Robert S. Keebler with Virchow, Krauss & Co.
of Green Bay, WI. You might give him a call.

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"Nan, EA in LA" <naneklund[at]aol.com> wrote:

- quote -

Normally a trust can deduct whatever taxable income it
distributes to beneficiaries, and the beneficiaries
recognize the income.

Doesn't that apply here?

Stu

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Deceased mother of client left her IRA with her trust as
beneficiary. She died in 2005 and the bank intends to pay
the total ($50,000 more or less) to the trust. There are 3
beneficiaries of the trust, my client being one and also the
trustee. I think she was already taking distributions but
am not sure yet. How the heck do we handle this so the 3
sons can spread the distribution and the trust doesn't pay
the tax on the total?

Nan, EA in LA

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >