Ask Your Tax Question. Tax Experts Answer You ASAP.

(Not a Tax Question?)

I HAVE INHERITED AN ANNUNITY FROM THE DEATH OF MY FATHER, ...

Sent to Tax Experts April 10 2008 at 8:51 PM
   

I HAVE INHERITED AN ANNUNITY FROM THE DEATH OF MY FATHER, HE TOOK HIS 2007 DISTRIBUTION AND THAT WAS CLAIMED IN HIS TAX RETURN, MY QUESTION IS, THE INSURANCE COMPANY SENT ME A 1099 FORM STATING THE AMOUNT OF MONEY THAT WAS TRANSFER TO AN IRA DIRECTLY FROM THEM TO XXXXXX XXXXX. THE FORM STATES THAT THE MONEY WAS A CLASS 4 DISTRIBUTION, I THINK IT IS A CLASS G BECAUSE IT WAS ROLLED INTO THE IRA AND MY FATHER HAD TAKEN HIS ANNUAL DISTRIBUTION. IS THIS CORRECT AND IF SO HOW WOULD I EXPLAIN IT TO THE IRS, OR GET THE INSURANCE CO TO CHANGE THE CLASS RATING OF DISTRIBUTION?

Customer (name blocked for privacy)
Answer
April 10 2008 at 8:53 PM (1 minute and 50 seconds later)
         

XXXXXXXXXXX,

An inherited IRA is an IRA for the beneficiary but with the deceased person's name in the registration. The title on the account is usually "XXXX XXXXX Beneficiary of the Jim Jones Deceased IRA". If your account is registered this way at XXXXXX XXXXX then it has the correct registration. A direct rollover to an inherited IRA is not permitted from a deceased's IRA account (it is permitted from a qualified plan or 403(b)). However, a direct transfer is permitted from one inherited IRA to another inherited IRA. The annuity company could have established the account as an inherited IRA. If this is what you were trying to accomplish, and completed the proper transfer paperwork rather than direct rollover paperwork, then the annuity company erred by issuing a 1099-R. If they made an error then they could issue a corrected 1099-R to correct it. You should also check with XXXXXX XXXXX to confirm that they coded the funds coming in as a transfer rather than as a rollover.

I have assisted hundreds of clients who have transferred inherited IRAs from one institution to another.

See page 21 - http://www.irs.gov/pub/irs-pdf/p590.pdf

 



Edited by Bill on April 10 2008 at 8:57 PM



If my response has been helpful, please press the ACCEPT button. If you need additional information or clarification, please let me know. Any feedback and bonuses are appreciated.

 

DISCLAIMER: Information in questions, answers, and other posts on JustAnswer ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), and do not establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations regarding the qualifications of Experts. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service.

JustAnswer > Tax