- 5 - additional tax. Petitioner argues that the entire distribution she received from her IRA was an amount received on or after the death of Mr. Campbell.4 We note that this Court has not previously decided whether an IRA distribution retains its character as a distribution to a beneficiary “on or after the death of an employee” if the distribution is of funds that were rolled over to the IRA upon the employee’s death. Respondent argues that once petitioner as surviving spouse decided to maintain the funds in an account in her own name as owner of the IRA, she became the owner of the IRA “for all purposes of the Code,” relying upon section 1.408-8, Q&A-5 and 7, Income Tax Regs. Petitioner counters that the funds from her deceased husband’s IRA did not lose their character as funds from her deceased husband’s IRA. Even though petitioner rolled over the funds from her deceased husband’s IRA into her separate IRA, petitioner did not make any additional contributions after her husband died and also did not “redesignate” the account as her own. See sec. 1.408-8, A-5(b), Income Tax Regs. We agree with respondent. We find that petitioner received the distribution from her own IRA, not from an IRA of which she was a beneficiary on or after the death of an employee. We further find that the source of the amount received, whether originating from her deceased husband’s IRA or petitioner’s own contributions, is irrelevant. We recognize that petitioner may not have technically 4Petitioner specifically argues that the distribution was of funds she inherited from her deceased husband’s IRA. We use the statutory language rather than the vernacular petitioner uses.Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011