IRS written determination 201430026

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
WASHINGTON, D.C. 20224
APR 2 9 2014
Uniform Issue List: 408.03-00
Legend:
Taxpayer
A·
=
Decedent B
=
IRAC
=
Custodian D =
Trust E
=
IRAF =
Dear:
!81430026
This is in response to your request dated May 1, 2013, as supplemented by
correspondence dated May 10, 2013 submitted on your behalf by your
authorized representative,
in which you request a ruling that IRA F (formerly IRA
C) will not be treated as an inherited IRA within the meaning
of section 408(d) of
the Internal Revenue Code (the "Code") with respect to you, and that you be
permitted to roll over the proceeds
of IRA F into an IRA maintained in your own
name.
The following facts and representations have been submitted under penalty of
perjury in support of the ruling requested:
Taxpayer A is the surviving spouse
of Decedent B, who died on March 11, 2012,
not having attained 70%. At his death, Decedent
8 maintained an individual
retirement account, IRA
C, with Custodian D. Decedent B had executed a
beneficiary designation form for IRA
Con December 14, 2007, in which he
named Trust E as the primary beneficiary.

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201430026
Trust E was established by Taxpayer A (Decedent B's spouse) on June 9, 1994.
Pursuant to Article
One, Section
1, of Trust E, Taxpayer A and Decedent 8 were
the initial trustees
of Trust E. Article Fifteen, Section 3 of Trust E provides that
upon Decedent B's death, Taxpayer A becomes the sole trustee
of Trust E.
Taxpayer A represents that she is currently acting as sole trustee of Trust E.
Pursuant to Article Four of Trust E, during her lifetime, Taxpayer A as owner of
Trust E has the express and total power to control and direct payments, add or
remove trust property, and amend or revoke Trust E.
Pursuant to Article Five of Trust E, Taxpayer A has the power to exercise without
approval
of any Trustee or any beneficiary, all rights, powers, options, and
privileges with respect to any retirement plan
or annuity or any other third-party
beneficiary contract made payable to Trust
E.
Taxpayer A represents that on April16, 2012, IRA C was transferred, via trustee-
to-trustee transfer, to IRA
F, an IRA for the benefit of Trust E.
As the owner and sole trustee of Trust E, it is Taxpayer A's intention to roll over
IRA F into one
or more IRAs set up and maintained in her own name.
Based on the facts and representations, you requested the following rulings:
1. Taxpayer A, as Decedent B's spouse, will be treated as having acquired IRA F
directly from Decedent 8 for purposes
of section 408(d)(3) of the Code, and not
from Trust
E.
2. IRA F will not be treated as an inherited IRA within the meaning of section
408(d)
of the Code with respect to Taxpayer A.
3. Taxpayer A is eligible to roll over the distribution from IRA F to an IRA
established and maintained
in her own name pursuant to section 408(d)(3)(A)(i)
of the Code, provided that the rollover occurs no later than the sixtieth day
following the day the proceeds of IRA Fare distributed.
4. Taxpayer A will not be required to include
in her gross income for federal
income tax purposes for the calendar year in which the distribution and rollover
occur the amount distributed from IRA F and timely rolled over into an IRA
. established and maintained in Taxpayer A's name.
Section 408(d)(1)
of the Code provides that, except as otherwise provided in
section 408(d), 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.

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201430026
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)).
Section 408(d)(3)(8)
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, in summary, that the rollover rules
of section 408(d)(3) do not apply to inherited IRAs.
Section 408(d)(3)(C)(ii)
of the Code provides that the term "inherited IRA" means
an IRA obtained by an individual, other than the IRA owner's spouse, as a result
of the death of the IRA owner.
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.
Generally,
if the proceeds of a decedent's IRA are payable to a trust, and are
paid to the trustee
of the trust, who then pays them to the decedent's surviving
spouse as the beneficiary
of the trust, the surviving spouse is treated as having
received the
IRA proceeds from the trust 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.

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201430026
However, the general rule will not apply in a case where the IRA has not yet
been distributed and the surviving spouse as the sole trustee of the decedent's
trust has sole authority and discretion under trust language 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.
In this case, Taxpayer A is the owner of Trust E. Furthermore, Taxpayer A
retains the lifetime power to revoke Trust
E, and has the power to distribute to
herself any portion or all
of the property of Trust E. Decedent 8 designated Trust
E as the beneficiary
of IRA C. Upon the death of Decedent 8, IRA C was
transferred to
IRA F for the benefit
of Trust E. As noted above, Taxpayer A was
Decedent
8's surviving spouse: Taxpayer A, as owner and sole trustee of Trust
E intends to distribute IRA F to herself as owner of Trust E and then roll over the
distribution to one or more
IRAs set up and maintained in her own name.
Therefore, with respect to your ruling requests, we conclude as
follows:
1. Taxpayer A, as Decedent B's spouse, will be treated as having acquired
IRA F from Decedent
B, for purposes of section 408(d)(3) of the Code,
and not from Trust
E.
2. IRA F will not be treated as an inherited IRA within the meaning of section
408(d)
of the Code with respect to Taxpayer A.
3. Taxpayer A is eligible to roll.over a distribution of the proceeds of IRA F
into an IRA set up and maintained
in her own name as long as the rollover
of the distribution occurs no later than the 60th day from the date the
distribution is received from IRA
F.
4. For the calendar year in which the distribution and rollover occur,
Taxpayer A
will not be required to include
in her gross income (for federal
income tax purposes) the amount distributed from IRA F and timely rolled
over into one or more IRAs established and maintained in Taxpayer A's
name.
This letter ruling assumes that
IRA F (formerly IRA C) met the requirements
of
section 408(a) of the Code at all relevant times and that Trust E is valid under
applicable state law.
It also assumes that the rollover IRA to be set up by
Taxpayer A will meet the requirements of section 408
of the Code at all relevant
times.
No opinion
is expressed as to the tax treatment of the transaction described in
this ruling under the provisions
of any other section of either the Code or
regulations which may be applicable.
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.

,-------------------------------
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201430026
A copy of this letter is being 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 (I. D. ) by
phone at or fax at . Please address all correspondence to
SE:T:EP:RA:T1.
Enclosures:
Deleted Copy
of Ruling Letter
Notice
of Intention to Disclose
cc:
Sincerely yours,
Carlton
A. Watkins, Manager
Employee Plans Technical Group 1