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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120800  
Subject: Re: Inherited IRA Date: 3/15/2001 4:55 PM
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<<"One option not available to non-spouse beneficiaries is rolling over the inherited IRA account into an existing IRA they own. (Only spouses have this option, and we'll discuss it in a bit more detail below.) If a non-spouse beneficiary does roll over the inherited IRA into his or her own existing IRA, the rollover is treated as a distribution, and the proceeds must be included in the beneficiary's income in the year the rollover occurs.">>

Thanks to Phil for the heads up on this paragraph. It might be one of the most misleading things I've ever written. Perhaps I should consider going to work for one of the political parties (either one...I don't care...whoever wants to pay me the most money). :-)

As Phil points out, this paragraph doesn't make a lot of sense. I was simply trying to point out that a non-spouse beneficiary can't "roll over" the decedent's IRA into his/her own IRA.

If you did try that gambit, not only would the distribution be taxable to the beneficiary(as I note in the paragraph above), but the "rollover" would be an excess contribution to the beneficiary's IRA, subject to penalties annually (as Phil correctly points out in his follow up).

So I'll try and re-write this section of the article ASAP after tax season and see if I can have it make a bit more sense. Sorry for the confusion, and thanks to Phil for the clarification.

TMF Taxes
Roy

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