In Private
Letter Ruling 201909003, the Internal Revenue Service ruled that an IRA payable
to an estate could be transferred to an inherited IRA for the benefit of the
estate’s beneficiaries. In the IRS ruling, the decedent received RMD’s
from the IRA during the year of their death and named the estate as
the sole beneficiary. In the decedent’s will, the decedent named their
entire estate to certain beneficiaries.
The division of the IRA (of the decedent) into inherited IRA’s for the
beneficiaries was not considered a taxable event. Per the ruling, the
beneficiaries can take RMD’s for each of the inherited IRA’s for the remaining
years of the life expectancy of the decedent and each beneficiary is then
responsible for any tax liability related to the RMD’s from their inherited
IRA’s.
Please
note that this ruling applied to the facts of a certain case that was submitted
and could have been avoided with proper planning on the front end. Interested in learning more? Contact the
experienced attorneys of Morris Law Group.
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