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Thirdly, recognition of community property interests would
affect the minimum distribution requirements for IRA’s. Section
408(a)(6) requires that distributions from an IRA account meet
the requirements of section 401(a)(9). Among those requirements
is that the individual for whom an IRA is maintained withdraw the
balance in the IRA or start receiving distributions from the IRA
by April 1 of the year following the year in which such
individual reaches 70-1/2. See sec. 401(a)(9)(c). Recognition
of a nonparticipant spouse’s community property interest in the
IRA might require the age of the nonparticipant spouse to be
taken into account in determining the commencement date for the
required distributions.
In addition, treating a nonparticipant spouse as a 50-
percent distributee would create an asymmetry. Section 219(f)(2)
provides that the deductibility of a contribution to an IRA is to
be determined without regard to any community property laws. See
Medlock v. Commissioner, T.C. Memo. 1978-464. Section 408(g)
appropriately balances that provision by disregarding community
property laws when the IRA funds are later distributed. These
sections work in tandem to insure that an IRA participant who
lives in a community property State is treated as both the sole
contributor and the sole distributee of IRA funds.
In Powell v. Commissioner, 101 T.C. 489, 496 (1993), we
indicated that the distribution of a community property interest
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Last modified: May 25, 2011