IRS Clears 3-Way Inherited IRA Split, Preserving Tax-Free Trustee Transfers

1 articles · Updated · currentfederaltaxdevelopments.com · Jun 14

PLR 202624001 lets an estate divide one decedent’s traditional IRA into three separate inherited IRAs for the beneficiaries, with each account used to calculate that beneficiary’s required minimum distributions.
The IRS said the new accounts qualify as inherited IRAs if they stay titled in the decedent’s name for each beneficiary and are funded through direct trustee-to-trustee transfers.
Those transfers will not be treated as taxable distributions or rollovers, removing the main tax risk in shifting each beneficiary’s share out of the estate-held IRA.
Because the estate was effectively the beneficiary, distributions from each inherited IRA must follow the decedent’s remaining life expectancy under Section 401(a)(9), offering a roadmap for similar multi-beneficiary estate administrations.