PLR 200229048: IRS amends the facts in an earlier inherited IRA ruling

Plain-English summary

The IRS amended one paragraph of an earlier private letter ruling about IRA distributions after a decedent's death. The replacement paragraph says the successor trustees plan to split a consolidated IRA into four separate IRAs, one for each child, and transfer them as part of a trust distribution. It also describes continued payments using the eldest child's fixed life expectancy and each child's rights over investments, beneficiaries, and faster distributions, subject to rights of the decedent's contingent beneficiaries. The letter states that the rest of the earlier ruling remains in effect. It does not set out a new analysis of the proposed transfers.

Ruling snapshot

• Question: What facts should replace the last paragraph on page two of the earlier IRA ruling?
• Outcome: Other, amendment to an earlier ruling
• Key authorities: IRC §§ 401(a)(9), 408

Full text (IRS public release)

DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
WASHINGTON, D.C. 20224

200229048
APR 23 2002

UIL: 401.00-00
408.00-00

Legend:

Decedent A =
B =
C =
D =
E =
Custodian F =
Trust G =

Dear

This letter modifies a private letter ruling, number 200211047, issued to you on December 17, 2001 on behalf of B, C, D, and E, concerning the federal income and estate tax consequences of certain transactions under Sections 408 and 401(a)(9) of the Internal Revenue Code, with respect to Individual Retirement Account (“IRA”) distributions following the death of Decedent A.

The last paragraph on page 2 shall be amended to read:

The Estate Trust settlement process has progressed to a point where the first Estate Trust distribution to the children can occur. The Successor Trustees desire to split the single consolidated IRA into four equal and identical IRAs, except that each IRA would be payable for the benefit of one of the four children of Decedent A. The Trustees then desire to transfer each separate IRA to each child of the deceased as part of the first Trust G distribution. Each IRA will continue to be held at Custodian F,

200229048

and be established as Decedent A IRA. Each child then proposes to continue the distribution format from each separate IRA, payable over the fixed life expectancy of the eldest child, as elected by the Successor Trustees. For all relevant times, Decedent A and the Children are all U.S. citizens; the accounting period is the calendar year; and the accounting method is the cash basis. Subsequent to the transfers, referenced herein, each child will have the right to direct investments of his/her IRA, name contingent beneficiaries in case of that child's death prior to the exhaustion of his/her IRA, and accelerate distributions from that IRA, furthermore, for purposes of this ruling letter, the Service notes that the child's rights to name contingent beneficiaries and accelerate distributions cannot conflict with the rights of the contingent beneficiaries named by the decedent.

Page 2

The rest of the subject private letter ruling will remain in full force and effect.

If you have any questions concerning this ruling, please contact at (202) 283-9831 (not a toll free number).

Sincerely yours,

Frances V. Sloan, Manager

Employee Plans, Technical Group 3
Tax Exempt and Government Entities Division

Enclosures:
Deleted copy of letter
Notice of Intention to Disclose
Copy of Letter to Authorized Representatives