Q. A prospective client inherited a 403(b) account from her father. She had the registration of the 403(b) updated to indicate that she is the beneficiary. She has taken distributions to cover the required minimum distributions. She would like to roll the funds over into an inherited IRA, but is concerned about possible tax consequences. I provided her a copy of IRS Publication 571 and highlighted the relevant section; however, she is looking for something more applicable to her circumstances.
A. There are a number of references to the direct rollover rules for nonspouse beneficiaries. IRS Publication 575 has some information. But there also is an IRS website which also includes another link to what is called the 402(f) Notice, which your organization might refer to as the “Special Tax Notice.” This is written by the IRS and is required to be given to the taxpayer when they are requesting a distribution.
This IRS website is located at https://www.irs.gov/retirement-plans/retirement-plan-participant-notices-distributions
And the 402(f) Notice is available at https://www.irs.gov/pub/irs-drop/n-09-68.pdf
Recent Comments
Does the roth requirement for catch-up contributions for people who earned $145,000 apply to 457...
Hi Ed,
I really liked this article and I think you make a lot of sense. And I had no...
I believe there's a misstatement in that last quote - it should refer to governmental and...
Working with several medical providers as clients, I note that the high-end earners tend to push...
Congratulations to NTSAA for landing a good one. Nathan's breadth of experience and...