PLR 201935005: Decedents IRA Not Inherited IRA

In PLR 201935005, the IRS ruled that a decedent’s IRA inherited by the surviving spouse (taxpayer) is not inherited IRA under Code Sec. 408(d)(3)(C).

The taxpayer was the sole beneficiary of the decedent’s IRA and had an unlimited right to withdraw amounts from it. The custodian of the decedent’s IRA retitled it pursuant to a court order and named the taxpayer as the sole beneficiary. 

The IRS ruled that as the sole beneficiary, the taxpayer would be eligible to roll over distributions from the decedent’s IRA to one or more IRAs established and maintained in her own name pursuant to Code Sec. 408(d)(3)(A)(i), as long as the rollovers occurred no later than the 60th day following the day the proceeds were received. 

The IRS also ruled that the taxpayer would not be required to include in gross income for federal tax purposes, for the year in which a distribution from the decedent’s IRA was made, any portion of the proceeds distributed from the decedent’s IRA which was timely rolled over to one or more IRAs set up and maintained in the taxpayer’s name.

Click PLR 201935005: Decedents IRA Not Inherited IRA to see full PLR.

Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.

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