Letter Ruling 199936052

• Author: Seymour Goldberg
• Profession: Senior partner in the law firm of Goldberg & Goldberg, P.C., in Woodbury, New York
• Pages: 160-163

160

LETTER RULING

199936052

In Letter Ruli ng 199936052, dated June 16, 1999, the beneficiary of an

inherited IRA was permitted to pick a successor beneficiar y. This is the

only letter ruli ng to date that has allowed an inherited IRA beneficiar y

to pick a successor beneficiary.

LETTER RULING 199936052

This rul ing is based on the pre-2002 final regulations and involves the

ability of a designated beneficiar y of an IRA who is in pay status to select

a successor beneficiary of the inherited IRA.

According to the facts i n the ruling, A whose date of birt h was June

8, 1926 died on March 8, 1998. At the time of A’s death, she maintained

an IRA wh ich she established by the rollover of an IRA that she inher-

ited from her deceased husband prior to her 70th birthday. Prior to

reaching her required beginning date, A named her only child, B as the

primary beneficiary of this IRA .

A elected to receive required minimum distributions from t he IRA

over the joint life expectancy of A and B but subject to the Minimum

Distribution Incidental Benefit Requirement (MDIB) under section

401(a)(9) and the proposed regulations. A received the mi nimum distr i-

bution for the year she attained 70½ (1996) and for the year in which she

died (1998). [Author’s note: The ruling does not mention if minimum

distributions were taken for the calendar year 1997.]

Pur suant t o an Elec tion L etter ex ecuted b y A prior to her req uired

beginni ng date, she elected to recalculate her life expect ancy annually.

In the Election Letter, she reserved the right (both to herself and to

her beneficiary) to take larger distributions than were required under

Code section 401(a)(9). The Election Letter and beneficiary desig na-

tions were still in ef fect when she reached her required beginning date.

As of the date of A’s death, B was still named as the primary ben-

eficiary on t he IRA and will take dist ributions over his remaining life

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