Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev | Next
Author: SuzanneSLO One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121144  
Subject: Re: Inherited IRA confusion Date: 6/9/2000 11:48 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
If I take my father's IRA and move it to an account with "Dad's IRA, FBO Me", then I can use the funds in your account to make any investment allowable in an IRA.

That's right.

Can I also maximize the time over which I take the distributions in this case (i.e. Dad's remaining life expectancy + mine) or must I take the distributions over 5 years?

You can take the distributions over your joint lifetime. The 5 year distribution rule is not applicable to you. It is only applicable to the heirs of those who die before April 1 of the year after they reach 70 1/2.

Or is doing a direct trustee-to-trustee transfer required to maximize the time over which I take the distributions in this case?

A trustee-to-trustee transfer is the only way to change trustees on an inherited IRA. If the funds are paid to you and then reinvested in an IRA within 60 days, you are out of luck. This will be treated as a distribution of all funds to you this year (on which you will owe taxes next April) and an overfunding of your IRA by about $58,000 (on which you will owe penalties). Not a pretty sight.

If I do the trustee-to-trustee transfer, how should the name on the IRA read?

It will read "Dad's IRA, FBO you." Make sure you tell the new trustee that you are transferring an inherited IRA so that they can advise you how to complete their forms. I know that Vanguard does not have any special form or box to check for this kind of IRA. They simply ask you to write "Inherited IRA" across the top of the transfer form. We really appreciated their excellant phone support when going thru this process.

Good luck. -- Suzanne
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev | Next

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Post of the Day:
Macro Economics

U.S. Stable, Europe Stalling
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement