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Discussion:401(k) distributions at death

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Discussion Forum Index --> Tax Questions --> 401(k) distributions at death


Hzarry (talk|edits) said:

8 September 2006
Can a 401(k) distribution be rolled into IRAs for the beneficiaries and then dsitributed over the next five years, if all the other variables apply for an IRA?

Riley2 (talk|edits) said:

9 September 2006
Starting in 2006, the answer will be yes. Until then, the answer is only a surviving spouse may do this.

Michaelstar (talk|edits) said:

9 September 2006
Riley2 - this is valuable knowledge / maybe - a learning lesson for us all if this is the only choice - but if rolled into an IRA - will we be required to distribute this $$ over only 5 years - I am not aware of the change. Certainly better than a 1009R in the first year but this s/b .......

Riley2 (talk|edits) said:

9 September 2006
The rollover account will be treated as an inherited IRA and the normal RMD rules for inherited IRA's will apply.

Michaelstar (talk|edits) said:

9 September 2006
That is great news - so the 5 years that Hzarry was referring to would only be an elected term and not be absolute.

Death&Taxes (talk|edits) said:

9 September 2006
Starting in 2006 or after 12/31/2006? "Effective for post-2006 distributions, nonspouse designated beneficiaries are allowed to rollover to an IRA inherited amounts in qualified plans, governmental Section 457 plans, or tax-sheltered annuities. The transferee IRA is subject to the required minimum distribution rules that apply to inherited IRAs of nonspouse beneficiaries." This is from a sample RIA letter to clients, and it is wonderful news.

Riley2 (talk|edits) said:

9 September 2006
Sorry, starting after 2006.

Jujufrsty (talk|edits) said:

6 March 2007
Is there a time limit to roll over the inherited ira? can I amend this time period?

Riley2 (talk|edits) said:

6 March 2007
Must be a trustee to trustee transfer. Otherwise, no time limit.

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