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Financial Planning / Tax Strategies


Subject:  Re: beneficiaries Date:  2/3/2010  2:24 AM
Author:  JAFO31 Number:  108868 of 130003


<<<...Assuming you mean only from a tax perspective, yes, because a Spouse can roll IRAs inhereited from his/her spouse into the first sposue's own IRA; no other beneficiary can do that...>>>

"This is my understanding; please correct me if I'm wrong:

Regarding income tax on an inherited traditional IRA:
- If the spouse inherits, s/he can roll it into his/her own IRA, and have no tax due at the time of rollover, but will still have to pay income tax on distributions later on, when the money is withdrawn.
- If the children inherit, they have to pay income tax when they inherit."

That is not correct.

I have previously posted a link to the Schwab guide (and am too lazy tooo look tonight). The gist of it is a 2 x 2 matrix, which depends upon wehther a spouse or a non-spouse inherits and whether the deceased had been obnligated to start RMDs. The details are all fuzzy.

You can also search "stretch IRA".

Regards, JAFO
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