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2010 Disclaimer Deadline Extended

Saturday, August 27, 2011  No comments

If you inherited from someone who died in 2010, the deadline for making a disclaimer has been extended to September 19, 2011.

But you have to be careful here. In order to have a qualified disclaimer you cannot have accepted any of the benefits or exercised any ownership over the property, among other requirements. You should consult with a legal advisor before making a disclaimer at this time for something you inherited in 2010.

Another caution - be sure that your disclaimer will be accepted at the state level as well as the federal level. The federal deadline has been extended due to the end of the year passage of the 2010 Tax Act. Make sure that your state deadline for disclaiming has been extended as well. Otherwise you could end up with different tax treatment at the state and federal levels for the asset you disclaimed.


-By Beverly DeVeny and Jared Trexler

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Thursday's Slott Report Mailbag

Consumers: Send in Your Questions to [email protected]

Q:
Ed:
I have your book, but unfortunately it is at my cabin so I don't have access right now. I am inheriting a Roth IRA from my wife, who recently passed away at 65. It was converted to a Roth in December 2008.

First question: Is it better to keep it as a separate Roth IRA, or add it into my existing Roth IRA?

Second question: Do I have to take RMDs on this account now or later?

Thanks,
John in AZ

A:
Question 1. As a spouse beneficiary you have two choices, other than taking a complete distribution.

A. You can establish a beneficiary Roth IRA or
B. Make it your own Roth IRA

If you select option B you will not have to take required minimum distributions (RMDs). With Option A, you would be required to take RMDs beginning in the year the deceased spouse would have attained age 70 1/2. Option B gives you the most flexibility. You can take distributions at any time (or not). It is your option. Distributions will be tax-free. Make sure you name your own beneficiary when you select your option.

Question 2. If you make it your own Roth IRA, you could combine it with your own Roth IRA.

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