Inherited IRA Titling by Non-Spouse

[DonB]

Client inherited a friends IRA and chose the Fidelity option to receive MRD payments. The IRA title showing on the 5498 is the clients name only. Lower on the form it states the name of the Original Depositor (friend) and has BDA (beneficiary distribution account). Everything I read says the titling must be in the name of the deceased for the benefit of "Joe Smith" to stretch the payments by MRDs. I had client call Fidelity to see what they had to say; and they said everything was OK. Client also received a letter from Fidelity at the time she elected the MRD option stating that "I would be receiving distributions as the beneficiary of the original account owner".

Anyone see a problem with the titling not being as the IRS says it should be?

I'm letting it ride as client and Fidelity know of my concern. Now in year 2 of MRDs.

[Burke]

Check the 1099-R for the distribution and see what it says. Should be Code 4, and show deceased's name and FBO [yr taxpayer.] If it doesn't, sounds like something is amiss.

[ATSMAN]

The 1099-R code should be 4 and Soc should be the taxpayer receiving the distribution. I don't pay too much attention to other misc docs from the bank when they apply to get a TOD, or transfer etc because it is too confusing. I look at the actual tax document.

[DonB]

The 1099-R is code 4 and the recipients name is that of my client. At the lower portion of the form it has "Original Depositor" friends name.

[Burke]

As long as your TP's SSN is on the 1099-R, everything should be okay.