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When I opened up an IRA I specified four beneficiaries, all as primary, with a equal split (25%).

When I die, what happens to the IRA account? Does the brokerage liquidate everything in the account and spread it equally among the beneficiaries?

***Generally, the beneficiaries determine how to take the distributions. A spouse may roll over her bequest into her own IRA. Others must take the distributions within a limited period of time. In any case, when distributions are made they are taxable to the beneficiaries or as income in respect of a decedent.

If a beneficiary receives a lump-sum distribution from an IRA he or she inherited, all or some of it may be taxable. The distribution is taxable in the year received as income in respect of a decedent up to the decedent's taxable IRA balance. This is the decedent's balance at the time of death, including unrealized appreciation and income accrued to date of death, minus any nontaxable basis (nondeductible contributions). Amounts distributed that are more than the decedent's entire IRA balance (includes taxable and nontaxable amounts) at the time of death are the income of the beneficiary.

If the beneficiary is the decedent's surviving spouse and that spouse properly rolls over the distribution into another IRA, the distribution is not currently taxed.

For the special rules on inherited IRAs, see Publication 590, Individual Retirement Arrangements (IRAs) (Including SEP-IRAs and SIMPLE IRAs).

Happy HolidayS!=:)

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