How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Bill Your Own Question
Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3153
Experience:  EA, CEBS - 35 years experience providing financial advice
Type Your Tax Question Here...
Bill is online now
A new question is answered every 9 seconds

My cousin is the beneficiary on her deceased ...

Resolved Question:

My cousin is the beneficiary on her deceased mom''s 403b appx $412K. Her mom died in Dec. 2006 but my cousin was only contacted in Jan. 2008 by the annuity co. I believe that she needed to start distributions by Dec. 2007 in order to roll it into a beneficiary IRA which would have allowed her to take distributions on her life expectancy (she''s 24). Is there any provision to allow an exeption or will she HAVE to take all of the money out over 5 years?
Submitted: 9 years ago.
Category: Tax
Expert:  Bill replied 9 years ago.

If the 403(b) plan's provisions have the 5 year rule as the default provision if the beneficiary does not elect the life expectancy option then she is locked into the 5 year rule. However, if the plan's default provision is the life expectancy option, then there still may be an opportunity to spread the distributions over her life expectancy. If the life expectancy option is available, then she missed the 2007 required distribution and would be subject to the 50% penalty on that amount. However, the IRS may waive the penalty if the error was due to reasonable cause.


Bill and 3 other Tax Specialists are ready to help you