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Tax Law (Questions About Taxes)/IRS distribution from estate


My relative died at age 68 with IRA with no named beneficiary. IRA Company said the estate was the "default" beneficiary and the probate estate is now holding the account as an IRA under "five year rule" as explained to me. We are ready for distribution but executor is not sure if heirs can succeed to the balance of the five year period and hold the funds as IRA themselves or if the funds must lose their IRA status on distribution to heirs. We would prefer to keep the IRA status if possible.

Worst possible outcome

Still is Ira and you receive as ird (income in respect to decedent).

Fully taxable to recipients.   No 5 year rule applies

No way to take out on beneficiary lives

Probate does not need to hold.  Can pay out immediate.  

All bene receive and pay tax now

Who is executor?  What else in estate

How long open?  

Tax Law (Questions About Taxes)

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Tax and general business including hospitality related (hotel mgmt degree and experience in industry prior to obtaining ms tax and cpa).


19 years cpa. ms tax. NOTE: My discussions are only a general information and do not constitute tax advise without entering into a specific agreement and executing an engagement letter; This free chat is nothing more than general information and should not be construed as tax advice nor does my response or replies imply an agreement to provide client specific advice or other guidance for purposes of avoiding IRS tax or penalties and should not be relied upon without your own validation and confirmation of the how the discussion may fit your facts... Not having all the facts and/or not having a direct client relationship prevents me from providing the most accurate replies as possible and I highly suggest using a local CPA to provide you with written advice and guidance. Taking matters into your own hands is much akin to trying to land an airplane without a license. It is easy to FLY a plane, but LANDING is when critical experience is key. In short, caveat emptor; do your homework and don't just rely on free chat board advice anywhere, anytime.

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