Tax-free rollover permitted even though estate is named as beneficiary of qualified plan interest

Article Abstract:

The IRS ruled in Private Letter Ruling 9524020 that a surviving spouse that receives the proceeds of a decedent's qualified plan through opting for an elective share may take advantage of the tax-free rollover provisions on IRC section 402(c). In this instance, the decedent had named his estate as the beneficiary. The IRS has ruled that distribution to a third party, including an estate or trust, would mean that the surviving spouse could no longer use the rollover provisions. Taking an elective share allowed this surviving spouse to take the distribution directly, without having it pass through the estate.

Decedents' estates, Qualified benefit plans, Tax elections

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PLRs provide guidance on estate planning implications of IRA beneficiary designations

Article Abstract:

Three IRS private letter rulings address estate and tax planning aspects of beneficiary designation for individual retirement accounts (IRAs). In one ruling, the IRS found that a surviving spouse could not use the rollover of IRA proceeds once the proceeds had passed through a trust. In another ruling, the IRS refused to recognize the designation of the estate as the IRA beneficiary and the IRA had to be distributed. In a third ruling, the IRS found that the designated beneficiary's life was the appropriate measuring life for mandatory distribution even though the beneficiary disclaimed distribution.

Beneficiaries

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IRS issues PLRs on elections for extensions of time to file

Article Abstract:

The IRS has in several private letter rulings indicated its basis for giving time extensions to make elections IRC 4980A(f) and Tax Reform Act of 1986 section 1124. These extensions will be based on a showing of good cause and evidence of an intent to make an election. Other factors will include whether the statute specifies the time period for the election and whether giving an extension would impact the government adversely. IRC 4980A(f) concerns the taxation of excess retirement funds.

Tax administration and procedure, Tax administration, Pension funds

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