Revenue Ruling 92- 47, 1992- 1 CB 198

• Author: Seymour Goldberg
• Profession: Senior partner in the law firm of Goldberg & Goldberg, P.C., Woodbury, New York
• Pages: 124-125

124

REVENUE RULING 92- 47,

1992- 1 CB 198

This revenue ruling involves the calculation of the amount of IRD with

respect to the amounts payable to a nonspouse beneficiary of a dece-

dent’s IRA.

According to the facts, A died owning an IRA that was payable to his

child, B. Some of the contributions by A to the IRA had been nondeduct-

ible contributions. The entire balance in the IRA, including appreciation

and income before and after A’s death was distributed to B shortly after

A’s death.

The IRS holding follows:

• The portion of a lump- sum distribution to the beneficiary of

decedent’s IRA that equals the amount of the balance in the IRA

at the owner’s death, including unrealized appreciation and in-

come accrued to that date, minus the aggregate amount of the

owner’s nondeductible contributions to the IRA, is income under

Sec. 408(d)(1) of the Code and is income in respect of a decedent

under Sec. 691(a)(1) that is includable in the gross income of the

beneficiary for the taxable year the distribution is received. (If the

designated beneficiary had been the owner’s surviving spouse, the

surviving spouse would have been permitted, under Sec. 408(d)(3)

(c), to roll the distribution over into another IRA and avoid current

inclusions).

• In accordance with Sec. 691(c) of the Code, in computing income

tax for the taxable year in which the income in respect of a dece-

dent is included in income, the beneficiary may claim a deduction

for the portion of federal estate tax on the decedent’s estate that

was attributable to that income in respect of a decedent.

• The portion of the lump- sum distribution to the beneficiary in

excess of the entire balance (including unrealized appreciation,