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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
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