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BK-CPA
BK-CPA, Certified Public Accountant (CPA)
Category: Finance
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Experience:  Owner of a CPA firm
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My wife & I both have non deductible ira's my wife passed

Customer Question

my wife & I both have non deductible ira's my wife passed away, how does hers get transferred to me
Submitted: 10 months ago.
Category: Finance
Expert:  BK-CPA replied 10 months ago.

Hello and thank you for your question.

You have a few options. The easiest is probably to just treat it as your own by designating yourself as the account owner.

https://www.irs.gov/publications/p590b/ch01.html#en_US_2015_publink1000230538

Inherited from spouse. If you inherit a traditional IRA from your spouse, you generally have the following three choices. You can:

  1. Treat it as your own IRA by designating yourself as the account owner.

  2. Treat it as your own by rolling it over into your IRA, or to the extent it is taxable, into a:

    1. Qualified employer plan,

    2. Qualified employee annuity plan (section 403(a) plan),

    3. Tax-sheltered annuity plan (section 403(b) plan),

    4. Deferred compensation plan of a state or local government (section 457 plan), or

  3. Treat yourself as the beneficiary rather than treating the IRA as your own.

Treating it as your own. You will be considered to have chosen to treat the IRA as your own if:

  • Contributions (including rollover contributions) are made to the inherited IRA, or

  • You do not take the required minimum distribution for a year as a beneficiary of the IRA.

You will only be considered to have chosen to treat the IRA as your own if:

  • You are the sole beneficiary of the IRA, and

  • You have an unlimited right to withdraw amounts from it.

Expert:  BK-CPA replied 10 months ago.

If this was a Roth IRA that you are referring to, then you can again elect to treat it as your own.

https://www.irs.gov/publications/p590b/ch02.html#en_US_2015_publink1000231084

If a Roth IRA owner dies, the minimum distribution rules that apply to traditional IRAs apply to Roth IRAs as though the Roth IRA owner died before his or her required beginning date. ... If the sole beneficiary is the spouse, he or she can either delay distributions until the decedent would have reached age 70½ or treat the Roth IRA as his or her own. ... A beneficiary can combine an inherited Roth IRA with another Roth IRA maintained by the beneficiary only if the beneficiary either:

  • Inherited the other Roth IRA from the same decedent, or

  • Was the spouse of the decedent and the sole beneficiary of the Roth IRA and elects to treat it as his or her own IRA.

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