Understanding the complexity of choices that face a retirement account beneficiary is key to satisfying IRS mandates, as well as maximizing the financial advantages of any inherited monies.Owners and future beneficiaries of retirement accounts are advised to seek professional advice before taking any action regarding them.These accounts are regulated by a host of Internal Revenue Service (IRS) rules, which provide guidelines for maximum yearly contributions, penalties for early withdrawals, and mandatory distribution amounts based upon the age and life expectancy of the account holder.When the owner of a retirement account dies, the account can be bequeathed to a beneficiary.
Accounts can be employer-sponsored, as in the case of a 401(k) plan, or they can be Individual Retirement Accounts (IRAs).
So if you have multiple IRA accounts and had planned to use the loophole to do a rollover from more than one account you are now out of luck.
Note this does not apply to a trustee-to-trustee transfer.
© James Leynse/Corbis IRA owners beware: Two recent rules on retirement accounts could throw your planning into disarray. That means that inherited IRAs are treated like all other inherited assets and it’s open season for creditors.
One rule came out of tax court: IRA owners are limited to one 60-day rollover between IRAs in a 12-month period across all of their IRA accounts. In January 2014, Alvan and Elisa Bobrow made an appearance in the U. Tax Court to plead their case regarding a string of 60-day rollovers among their IRA accounts.