IRS written determination 201430020

Private letter rulings and published taxpayer determination letters. Native document type is retained separately; a determination letter is not labeled a private letter ruling. These taxpayer-specific releases cannot be used or cited as precedent under 26 USC 6110(k)(3); applicability and current legal force are not independently certified. Keep repeated UILC subjects attached to one actual numbered document.

TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
WASHING"ION, D.C. 20224
MAY 0 1 2014
Uniform Issue List: 408.03-00
Legend:
Taxpayer A
=
Decedent 8
=
Financial Institution
C
=
IRAD
=
IRAE
=
IRAF
=
Court G
=
State H
=
Date 1
=
Date2
=
Date 3
=
Date4
=
201430020

2
201430020
Date 5
=
Date6
=
Amount 7
=
Dear:
This letter is in response to your request dated January 24, 2013, as supplemented by
correspondence dated December 12, 2013, and January 14, 2014 from your authorized
representative, in which you request a waiver
of the 60-day rollover requirement
contained
in section 408(d)(3) of the Internal Revenue Code (the "Code").
The following facts and representations have been submitted under penalty of perjury in
support
of the ruling requested:
Decedent
B, whose date of birth was Date 1 died on Date 2, not having attained the age
of 70 %. Decedent 8 was survived by his wife, Taxpayer A, whose date of birth is Date
3. At the time of his death, Decedent B maintained IRA D with Financial Institution C.
The beneficiary designation for IRA D completed by Decedent 8 stated "as provided by
my will." Decedent B's Last Will and Testament ("Will") bequeathed his residuary estate
to Taxpayer A, his wife,
if she survived Decedent 8 for at least six months. Taxpayer A
did survive Decedent
8 for at least six months and was his sole beneficiary. Taxpayer A
was appointed sole Personal Representative of Decedent B's Estate by Court G in
State H on Date 4.
Financial advisors at Financial Institution C advised Taxpayer A that due to Decedent
B's
failure to name a designated beneficiary, IRA D would be required to be transferred
into an estate IRA.
In March 2010, IRA D was transferred into IRA E (Decedent B's
Estate IRA). On Date
5, a distribution of Amount 7 was made from IRA E to Taxpayer
A, as Personal Representative
of Decedent B's Estate and as sole beneficiary of the
Estate. On Date
6, within sixty (60) days after receipt of Amount 7, Taxpayer A
completed a rollover
of Amount 7 into IRA F, a rollover IRA in the name of Taxpayer A
maintained with Financial Institution
C.
Taxpayer A, in her capacity as sole Executor and as sole beneficiary of Decedent B's
Estate, intends to receive the
balance
of IRA E and within sixty (60) days after receipt of
such distribution, Taxpayer A will transfer such distribution to IRA F.
Based on the facts and representations, Taxpayer A requests the following rulings:
1. The distribution of Amount 7 from IRA E (the Estate IRA) to Taxpayer A, as
Personal Representative
of Decedent B's Estate and as sole beneficiary of the
Estate, constituted an eligible rollover distribution under section 408(d)(3)(A) of
the Code in the year it was distributed and transferred to IRA F, and, therefore,
such amount is not includible in the income
of Taxpayer A in the year in which
such amount was distributed and transferred.

3
201430020
2. Taxpayer A will be eligible to roll over the remaining proceeds from IRA E into
IRA F pursuant to section 408(d)(3)(A)(i)
of the Code, as long as the rollover
occurs no later than the
60th day from the date the proceeds are received by
Taxpayer A in her capacity as sole Personal Representative and sole beneficiary
of Decedent B's Estate.
Section 408(d)(1)
of the Code provides that, except as otherwise provided in section
408(d)
of the Code, any amount paid or distributed out of an IRA shall be included in
gross income by the payee or distributee, as the case may be, in the manner provided
under section 72
of the Code.
Section 408(d)(3)
of the Code defines and provides the rules applicable to IRA rollovers.
Section 408(d)(3)(A)
of the Code provides that section 408(d)(1) of the Code does not
apply to any amount paid or distributed out
of an IRA to the individual for whose benefit
the IRA is maintained
if:
(i) the entire amount received (including money and any other property) is paid into
an IRA for the benefit of such individual not later than the
60th day after the day on
which the individual receives the payment or distribution;
or
(ii) the entire amount received (including money and any other property) is paid into
an
eligible retirement plan (other than an IRA) for the benefit
of such individual not later
than the
60th day after the date on which the payment or distribution is received, except
that the maximum amount which may be paid into such plan may not exceed the portion
of the amount received which is includible in gross income (determined without regard
to section 408(d)(3)
of the Code).
Section 408(d)(3)(B)
of the Code provides that section 408(d)(3) of the Code does not
apply to any amount described in section 408(d)(3)(A)(i) of the Code received by an
individual from an IRA
if at any time during the 1-year period ending on the day of such
receipt such
individual received any other amount described in section 408(d)(3)(A)(i)
of
the Code from an IRA which was not includible in gross income because of the
application of section 408(d)(3) of the Code.
Section 408(d)(3)(C)(i)
of the Code provides that in the case of an inherited IRA, section
408(d)(3) shall not apply to any amount received by an individual from such account
(and no amount transferred from such account to another IRA shall be excluded from
income by reason
of such transfer), and such inherited account shall not be treated as
an IRA for purposes
of determining whether any other amount is a rollover contribution.
Section 408(d)(3)(C)(ii) of the Code provides that the term "inherited IRA" means an IRA
acquired by an individual, other than the IRA owner's spouse, as a result
of the death of
the IRA owner.

4
Section 1.408-8 of the Income Tax Regulations, Question and Answer 5 ("Q&A 5")
provides that a surviving spouse of an IRA owner may elect to treat the spouse's entire
interest as a beneficiary in an individual's IRA as the spouse's own IRA. In order to
make this election, the spouse must be the sole beneficiary
of the IRA and have an
unlimited right to withdraw amounts from the
IRA. If a trust
is named as beneficiary of
the IRA, this requirement is not satisfied even if the spouse is the sole beneficiary of the
trust.
In the present case, Decedent B's IRA D was transferred to his Estate IRA, IRA
E.
Taxpayer A is both the sole Executor and the sole beneficiary of Decedent B's Estate
with the right to dispose
of the assets of the Estate. Under this set of circumstances, no
third party can prevent Taxpayer A from receiving the proceeds
of IRA E and rolling
those proceeds over into IRA
F.
Generally, if the proceeds of a decedent's IRA pass through a third party, e.g. a trust or
an estate, and then are distributed to the decedent's surviving spouse, the surviving
spouse shall be treated as having received the IRA proceeds from the third party and
not from the decedent's IRA. Thus, generally a surviving spouse shall not be eligible to
roll over the distributed IRA proceeds into his or her own IRA. However, the general rule
will not apply in a case where the IRA has not yet been distributed and the surviving
spouse as executor
of the decedent's estate has sole authority and discretion to pay the
IRA proceeds to him/her. In such a case, when the surviving spouse actually receives
the IRA proceeds, the surviving spouse may roll over the amounts into an IRA set up
and maintained in his/her name within 60 days.
Under this set
of circumstances, the general rule set forth above will not apply.
Therefore, with respect to your ruling requests, we conclude that:
1. The distribution of Amount 7 from IRA E (the Estate IRA) to Taxpayer A, as
Personal Representative
of Decedent B's Estate and as sole beneficiary of the
Estate, constituted an eligible rollover distribution under section 408(d)(3)(A)
of
the Code in the year it was distributed and transferred to IRA F, and, therefore,
such amount is not includible
in the income of Taxpayer A in the year in which
such amount was distributed and transferred.
2. Taxpayer A will be eligible to roll over the remaining proceeds from IRA E into
IRA F pursuant to section 408(d)(3)(A)(i)
of the Code, as long as the rollover
occurs no
1ater than the 60th day from the date the proceeds are received by
Taxpayer A in her capacity as sole Personal Representative and sole beneficiary
of Decedent B's Estate.
No opinion
is expressed as to the tax treatment of the transaction described herein
under the provisions of any other section of either the Code or regulations which may be
applicable thereto.
-·:..;;·_ ·'

r---·----
5
201430020'
This letter is directed only to the taxpayer who requested it. Section 6110(k)(3) of the
Code provides that it may not be used or cited as precedent.
A copy
of this letter ruling has been sent to your authorized representative pursuant to
a power
of attorney on file in this office. If you wish to inquire about this ruling, please
contact (ID
# ) at ( ) -. Please address all correspondence to
SE:T:EP:RA:T1.
Enclosures:
Deleted copy
of ruling letter
Notice
of Intention to Disclose
CC:
Sincerely,
(!Mltfe-r.-14: t6~n5
Carlton A. Watkins, Manager
Employee
Plans Technical Group 1