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Kbamonti
New Member

Inherited IRA

My spouse passed away March 2019, I have and inherited IRA.  Do I I need to take RMD (required minimum distributions)   if that IRA was moved to spousal inherited IRA then to spousal traditional IRA?  I have been told no, but need confirmation.

Thank you

14 Replies
Critter
Level 15

Inherited IRA

Ok ... first any RMD required of the decedent must be taken first ... then the balance is rolled to the spouse's IRA and is then treated as any other IRA for that person.  An RMD is only required if that person has that requirement. 

 

 

 

Inherited from spouse. If a traditional IRA is inherited from a spouse, the surviving spouse generally has the following three choices:

  1. Treat it as his or her own IRA by designating himself or herself as the account owner.
     
  2. Treat it as his or her own by rolling it over into a traditional IRA, or to the extent it is taxable, into a:
    a. Qualified employer plan,
    b. Qualified employee annuity plan (section 403(a) plan),
    c. Tax-sheltered annuity plan (section 403(b) plan),
    d. Deferred compensation plan of a state or local government (section 457(b) plan), or
     
  3. Treat himself or herself as the beneficiary rather than treating the IRA as his or her own.

If a surviving spouse receives a distribution from his or her deceased spouse's IRA, it can be rolled over into an IRA of the surviving spouse within the 60-day time limit, as long as the distribution is not a required distribution, even if the surviving spouse is not the sole beneficiary of his or her deceased spouse's IRA.

 

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-beneficiary

RachelW33
Employee Tax Expert

Inherited IRA

First, I would like to express my condolences on the passing of your spouse.  

 

Whether or not you need to take a Required Minimum Distribution (RMD) from your spousal traditional IRA depends on your age (not your husband's age).  Once you roll the inherited IRA into your own IRA, from that point on, it is subject to the same rules as any other IRA you own.  Therefore, you will only need to take an RMD for 2019 if you have reached the age of 70 1/2 by 12/31/2019.  

 

Please keep in mind, if your spouse had already reached the age of 70 1/2 when they passed away, they are still subject to their RMD for 2019.  Their RMD is the amount they would have been required to take before they passed away based on their age, life expectancy and account balance.

 

For more information on RMD's, please check out this IRS link: Required Minimum Distributions.

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dmertz
Level 15

Inherited IRA

Wiht respect to the IRA you inherited from your spouse, you have no RMD requirement for 2019 if your spouse had no RMD that needed to be taken for 2019, your spouse completed the 2019 RMD, or 2019 was the first year for which your spouse was required to take an RMD (died before your spouse's Required Beginning Date for RMDs).

rdh
Level 3

Inherited IRA

Question:  My wife passed away in March of 2019 at age 54.  She had a Fidelity Traditional IRA and I have a Fidelity Rollover Traditional IRA.  In March of 2019 after she passed away, I asked Fidelity to transfer all of my wife's Traditional IRA to my Traditional IRA.  They did that and the end of March 2019 statement for my IRA shows the transfer into my IRA. However, I don't have any document saying her IRA changed to me or document saying the assets went to an "Inherited" IRA.  Should there be documentation of that?  Fidelity says that the transfer "was coded correctly".  All of the money is in my IRA as of the end of March 2019.  I did receive a 5498 in her name in the mail from Fidelity just recently (Jan 2020) since she contributed to her IRA in January 2019 before passing away. The statement shows an account balance of zero as of 12/31/2019.  Do I need any other documentation saying that I am assuming the IRA as my own as the spouse?

VictorW9
Expert Alumni

Inherited IRA

Usually, when someone inherits an IRA, a new RMD is calculated based on the age of the beneficiary. However, as this is your spouse, it may not be as complicated as to when a non-spouse inherits an IRA. I believe Fidelity would have taken care of those pieces when they make the transfer. The accounts were both traditional IRAs and that's probably why this was a simple transfer. But you can call Fidelity again and ask them about any of your lingering questions so you can be rest assured. 

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rdh
Level 3

Inherited IRA

Thanks.  Called Fidelity and they said just what you said since it was a simple transfer to a spouse and no RMD required.  It is all in my IRA now as if it were my own.

dmertz
Level 15

Inherited IRA

The movement to your IRA if the IRA that you inherited from your wife can be done by either reportable rollover or by nonreportable trustee-to-trustee transfer, with trustee-to-trustee transfer being far preferable since it avoids any concern regarding the one-rollover-per-year limitation on rollovers.  Since the trustee of both accounts was Fidelity, it would be extremely unusual for them to do this by distribution and rollover, so you should except this to have been done by nonreportable trustee-to-trustee transfer, which Fidelity appears to have confirmed, and there is nothing to to report of this transfer on your tax return.

 

There are no RMDs involved since your wife was only age 54, so I don't know the purpose of VictorW9's post.

VictorW9
Expert Alumni

Inherited IRA

I was trying to make a distinction between a spousal vs a non-spousal inheritance. Usually with a non-spousal inheritance a new RMD is calculated based on the beneficiaries age which may differ from the donor's RMD and can make a transfer complicated or impossible. OP mentioned about RMD and I was trying to give some insight into the question of RMD.

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johnginger
Returning Member

Inherited IRA

My wife past away and I did a trustee to trustee transfer to treat as my own IRA account this year.  No RMD was needed.  What do I do on my form 8606 cost basis in regards to my inherited spouse IRA non-deductible contributions.  Can I transfer them this year (year she past away) or do I wait till next year?  I filled out an 8606 for her since she made contributions in 2019 before passing away.

dmertz
Level 15

Inherited IRA

johnginger, when you say, "I did a trustee to trustee transfer to treat as my own IRA account this year" do you mean in 2019 or 2020?  If the trustee-to-trustee transfer did not happen until 2020, you would not include the adjustment to your own basis on your 2019 Form 8606.

Critter
Level 15

Inherited IRA

Unless you took a distribution in 2019 then you have no reason to file an 8606 in 2019.  The next time you take a distribution you will add your basis and hers together on your 8606. 

johnginger
Returning Member

Inherited IRA

I meant 2019.  It was a simple transfer over to me to treat as my own.  So can I combine her IRA basis with my IRA basis on my 2019 Form 8606-T since I own the IRA now?  

Critter
Level 15

Inherited IRA

Correct.

johnginger
Returning Member

Inherited IRA

Thank You All!

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