Your Taxes: Relief for non-spouse IRA beneficiaries

February 6, 2008

Beginning this year, if you inherit an IRA or qualified plan from someone other than your spouse you'll be allowed to roll those monies into your own IRA.

Beginning this year, if you inherit an IRA or qualified plan from someone other than your spouse you'll be allowed to roll those monies into your own IRA, according to Tax Facts News. Prior to 2008, most employer-sponsored plans required non-spouse beneficiaries to take the money in the account as a lump-sum distribution, which often triggered a huge tax bill. This good news aside, some rules regarding non-spouse rollovers will remain unchanged from 2007: A trust may be the beneficiary of a direct rollover to an IRA; the rollover may exclude any required minimum distributions due from the plan for that year; and the recipient's IRA must identify the deceased and the beneficiary (for example, "Pete Thompson as beneficiary of Robert Thompson").