FAQ FRIDAY 2/15/08

Q. I am the beneficiary of an Individual Retirement Account (IRA). Can I roll it over into my own IRA?

A. No. A beneficiary IRA is differentiated from a Traditional IRA that you might have for yourself and the tax rules are different. You can do a Trustee to Trustee transfer of the IRA of the decedent into a specially designated IRA such as ‘Decedent IRA FBO Beneficiary’, where ‘Decedent’ is the person from whom you inherited it and ‘beneficiary’ is your name. FBO means ‘For the Benefit of’. There are very, very strict rules on these types of transfers and you must fully understand them before you make any irrevocable elections.
Next time, we’ll continue with further questions on this topic.

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