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Posted by drace1 on July 26, 2008, 10:14 am
I'm 68 years old and have a work related 401(k) rollover brokerage
account. I'd like to transfer my deceased spouses IRA to that account
without penality. The account is with a different brokerage firm and
I am the soul beneficiary. The account is titled:
MY NAME BENE
MY WIFE'S NAME DCD IRA CNDT
I don't know what the CNDT stands for. She has been deceased for more
than 5 years.
If I can do this, should I have her brokerage firm send me a check and
then I send it to my broker? or can I do a transfer between firms?
Thanks in advance for your advice.
Dave
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Posted by Ron Peterson on July 26, 2008, 12:25 pm
> I'm 68 years old and have a work related 401(k) rollover brokerage
> account. I'd like to transfer my deceased spouses IRA to that account
> without penality. The account is with a different brokerage firm and
> I am the soul beneficiary. The account is titled:
> MY NAME BENE
> MY WIFE'S NAME DCD IRA CNDT
> I don't know what the CNDT stands for. She has been deceased for more
> than 5 years.
> If I can do this, should I have her brokerage firm send me a check and
> then I send it to my broker? or can I do a transfer between firms?
IIRC, you can't transfer funds in a IRA to a 401(k). However, you can
transfer your spouse's IRA to your IRA.
--
Ron
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Posted by joetaxpayer on July 26, 2008, 2:36 pm
Ron Peterson wrote:
> IIRC, you can't transfer funds in a IRA to a 401(k). However, you can
> transfer your spouse's IRA to your IRA.
Afraid you are behind the code changes. It used to be you needed to keep
a 401(k) rollover to an IRA in a specially titled 'rollover' account if
you had any intention of putting it into a future 401(k). Now, employer
permitting, I am allowed to transfer any pre-tax IRA money I have into
my 401(k).
Why would one do this?
A) You can retire from the company at 55 and take withdrawals without
being subject to the 59-1/2 age rule or worrying about Sec(72t) math.
B) Having saved $50K in non-deductable IRA deposits, this is the chance
to convert it to Roth, and not be subject to taxes. If there's no
pre-tax IRA money to tax, the conversion is free. Wahoo!
C) The 401(k) has some low cost fund, or otherwise closed fund that
can't be gotten into otherwise.
But I don't think OP asked that. He said he has a "work related 401(k)
rollover brokerage account." That's ambiguous enough to me. Sounds like
he already rolled the 401(k) to an IRA, but just wants to combine
accounts. It also sounds like the deceased spouse account was retitled
as I warn people they must title a non-spousal inherited IRA. There may
have been a valid reason to do so, but that titling prevent the accounts
from getting combined, I believe. It also impacts the way RMDs are
calculated, I also believe.
You are right that one can transfer the spouses IRA into their name and
it's theirs, as if it always was. I just don't know if the current
scenario is undoable.
Joe
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Posted by Andrew Koenig on July 26, 2008, 2:20 pm
> If I can do this, should I have her brokerage firm send me a check and
> then I send it to my broker? or can I do a transfer between firms?
>From everything I've heard, you should *never* have a financial institution
send you a check from an IRA if you're intending to move it, because of the
risk that the transaction might be considered taxable. Instead, transfer
directly from one firm to the other.
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Posted by Dave Dodson on July 26, 2008, 6:38 pm
> From everything I've heard, you should *never* have a financial institution
> send you a check from an IRA if you're intending to move it, because of the
> risk that the transaction might be considered taxable. Instead, transfer
> directly from one firm to the other.
There is no danger of the transaction being taxable if you complete
the rollover within 60 days. The old custodian will send you a form
next January saying that you took a distribution. You enter that on
your tax return, e.g., on line 15a of the the Form 1040. Right next
to that, on line 15b, you report the taxable portion of that
distribution. If you completed the rollover within 60 days, the
taxable portion would be $0. Line 15b then is one of the lines that
enters into the adjusted gross income. Line 15a is not used anywhere
else that I am aware of.
I do think that a trustee-to-trustee transfer is the easiest way to
go, though.
Dave
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to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
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MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
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