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    10% penalty ?

    Taxpayer's husband died 5 years ago at a work related accident. 2007 taxpayer rolls deceased husband's retirement annuity to IRA in her name. She then withdrew $35000 from the IRA in 2007. Does this retain the "exception to 10% penalty" as a distribution to a beneficiary on or after death?

    #2
    10% Penalty

    Originally posted by Bucky View Post
    Taxpayer's husband died 5 years ago at a work related accident. 2007 taxpayer rolls deceased husband's retirement annuity to IRA in her name. She then withdrew $35000 from the IRA in 2007. Does this retain the "exception to 10% penalty" as a distribution to a beneficiary on or after death?
    No, it doesn't.
    Jiggers, EA

    Comment


      #3
      No. The code says:
      "Distribution to a beneficiary (or the estate) on or after the death of the participant. Does not apply to modified endowment contracts.
      If she put it in her own IRA, then the distribution from her own IRA is not on account of her own death.

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