The IRS ruled that the representative of a decedent’s trust was not allowed to transfer an Individual Retirement Account’s (IRA’s) assets currently held in the non-IRA account into an inherited IRA for the benefit of the trust. The assets in an inherited IRA for the benefit of a trust are not permitted to be rolled over under Code Sec. 408(d)(3). The only permitted method of transferring assets from an inherited IRA to another inherited IRA is via a trustee-to-trustee transfer, which requires a direct transfer from one IRA to another IRA.
Posted by Jessica Ji, Associate Editor, Wealth Strategies Journal.