PLR 200528033: Inherited retirement accounts may be transferred, but distributions use the oldest trust beneficiary's life expectancy

Plain-English summary

A deceased account holder named a trust as beneficiary of an IRA and a section 403(b) account. The trust allocated interests to a subtrust for five nieces and nephews. The IRS treated one beneficiary as a timely named beneficiary and allowed direct trustee-to-trustee transfers of his interests into inherited accounts maintained in the decedent's name. As a nonspouse beneficiary, he could not take distributions and roll them over himself. For required minimum distributions from both accounts, the IRS used the life expectancy of the decedent's older spouse, who benefited from another subtrust. The trustee's later allocation to the nieces' and nephews' subtrust did not change the original trust beneficiary designation or permit separate account treatment for its beneficiaries.

Ruling snapshot

• Question: Can a trust beneficiary transfer inherited IRA and 403(b) interests and use his subtrust's oldest beneficiary to calculate required distributions?
• Outcome: Mixed: direct transfers allowed; the older beneficiary of the entire trust controls the distribution period.
• Key authorities: IRC §§ 401(a)(9), 403(b), 408(d); Treas. Reg. §§ 1.401(a)(9)-4, 1.401(a)(9)-5, 1.401(a)(9)-8; Rev. Rul. 78-406 and 90-24.

Full text (IRS public release)

DEPARTMENT OF THE TREASURY

INTERNAL REVENUE SERVICE
WASHINGTON, D.C. 20224

200528033

TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION

APR 18 2005

UICs: 401.06-00
401.06-02

SE:T:EP:RA-T3

LEGEND:
Taxpayer A:
Individual B:
Individual C:
Individual D:
Individual E:
Individual F:
Individual G:
Trust T:
Subtrust U:
Subtrust V:
Date 1:

Date 2:

Date 3:

Date 4:

Date 5:

Date 6:

Page 2

Date 7:
Date 8:
Date 9:
Date 10:

IRA X:

IRA Y:

Plan W:

Account U:

Company L:

Company M:

Company N:
State O:

Rule Q:

Percentage 1:

Percentage 2:

Section 4:

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Dear [redacted]:

This is in response to the [redacted], request for letter rulings under sections 401(a)(9) and 408(d) of the Internal Revenue Code submitted on your behalf by your authorized representative as supplemented and revised by correspondence dated
[redacted], as further supplemented by correspondence dated [redacted], [redacted],
[redacted], and November 8, 2004, and as revised by correspondence dated [redacted]. The request for letter rulings is based on the following facts and representations.

Taxpayer A, whose date of birth was Date 1, 1936, died on Date 2, 2001 at age 64, a resident of State O. As of her date of death, Taxpayer A owned IRA X which was maintained with Company L, and was entitled to receive amounts under Plan W which was maintained with Company M.

Taxpayer A was survived by her husband, Individual G, and by five (5) nieces and nephews, Individuals B through F. Individual B, Taxpayer A’s nephew, was born on Date 6, 1959: Individual C was born on Date 7, 1956: Individuals D and E were born on Date 8, 1968; and Individual F was born on Date 9, 1966. Individual C is the eldest of Individuals B through F. Individual G is older than Individual C.

On or about Date 4, 2000, Taxpayer A named Trust T as the beneficiary of 50% of her IRA X, and Subtrust U, created under the provisions of Trust T, as the beneficiary of the remaining 50% of IRA X. Consistent with the language of Trust T, and as required under the Statutes of State O, the 50% of IRA X payable to Trust T as beneficiary thereof was allocated to Subtrust V, created thereunder, in order to fully utilize Taxpayer A’s Federal estate tax exemption. Said allocation was made prior to September 30, 2002, the calendar year following the calendar year of Taxpayer A’s death. Furthermore, said allocation was reflected on the Federal Form 706, United States Estate (and Generation- Skipping Transfer), Tax Return, filed with respect to Taxpayer A’s estate.

On Date 10, 2003, the Internal Revenue Service issued an acceptance letter with respect to the estate of Taxpayer A.

With respect to the allocation of IRA X, your authorized representative has asserted that Rule Q, found at Section 4 of the Statutes of State O, required the trustee of Trust T, to allocate [redacted]% of IRA X to Subtrust V in order to minimize the tax consequences of making distributions from IRA X. Furthermore, your authorized representative has asserted that said allocation was made in order to comply with the trustee’s duty to manage Trust T assets “consistent with the trustee’s duty of impartiality and the purposes of the trust” as required under Section 4 of the Statutes of State O.

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On or about Date 5, 2000, Taxpayer A named Trust T as the beneficiary of her interest in Plan W. In accordance with Article Fourth of the Second Amendment of Trust T, Percentage 1 of Taxpayer A’s interest in Plan W was allocated to Subtrust U and Percentage 2 of said interest was allocated to Subtrust V.

Trust T was created by Taxpayer A, as grantor and trustor, on Date 3, 1989. Trust T has been subsequently amended and restated. Your authorized representative has asserted that Trust T is valid under the laws of State O.

Article Ninth of Trust T, as amended, provides that Trust T became irrevocable at the death of Taxpayer A.

Individual B and Company N are the co-trustees of Trust T.

Article Fourth of the Second Amendment to Trust T creates Subtrust U for the benefit of Individual G. Article Fifth of the Second Amendment to Trust T creates Subtrust V to benefit Individuals B through F. Article Fifth, section 1, of the Second Amendment to Trust T provides, in relevant part, that a beneficiary’s interest under Subtrust V shall be distributed to said beneficiary when he or she reaches the age of 21. Individuals B through F had all attained age 21 as of Date 2, 2001, the date of Taxpayer A’s death. Pursuant to Article Fifth, section 1, of Trust T, the interests of the five beneficiaries named therein shall be equal.

It has been represented that copies of the amended Trust T were provided to Company L and Company M within one (1) month of the date of Taxpayer A’s death.

Subsequent to the death of Taxpayer A, the [redacted]% of IRA X payable to Trust T and allocated to Subtrust V, pursuant to the provisions of Trust T and as required under the statutes of State O, was transferred, by means of a trustee to trustee transfer, to IRA Y set up and maintained with Company N in the name of Taxpayer A with Subtrust V as the beneficiary thereof.

Additionally, subsequent to the death of Taxpayer A, the percentage of Plan W that was payable to Subtrust V, Percentage 2, was transferred, by means of a direct trustee-to-trustee transfer, to Account U set up and maintained with Company N in the name of Taxpayer A with Subtrust V as the beneficiary thereof.

Individual D intends to accomplish trustee to trustee transfers of his interest in Taxpayer A’s IRA X (now IRA Y) and of his interest in Taxpayer A’s Plan W (now Account U). Such transfers will be into an IRA maintained in the name of Taxpayer A to benefit Individual D and into a section 403(b) account set up and maintained in the name of Taxpayer A to benefit Individual D respectively.

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Your authorized representative has asserted that, with respect to calendar year [redacted] distributions intended to meet the requirements of Code § 401(a)(9) have been made from IRA X (now IRA Y) to Trust.T over the life expectancy of Individual C. Furthermore, with respect to calendar year [redacted] distributions from Plan W (now Account U) intended to comply with the minimum required distribution rules have been made using the life expectancy of Individual G.

Based on the above facts and representations, you, through your authorized representative, request the following letter rulings:

1. That, for purposes of Code section 401(a)(9), Taxpayer A timely named
   Individual D as a beneficiary of the interest in her IRA X (now IRA Y) payable to Trust T (and allocated to Subtrust V);

2. That, for purposes of Code section 401(a)(9), Taxpayer A timely named
   Individual D as a beneficiary of the percentage (Percentage 2) of her interest in Plan W (now Account U) payable to Trust T;

3. That Individual D, as a beneficiary of Trust T’s (Subtrust V’s) interest in
   Taxpayer A’s IRA X (now IRA Y), may transfer, by means of a direct trustee to trustee transfer, his interest in IRA Y into another IRA described in Code § 408(a) set up and maintained in the name of Taxpayer A for the benefit of Subtrust V, beneficiary thereof, and payable to Individual D, beneficiary thereof; and

4. That Individual D, as a beneficiary of Subtrust V’s interest (Percentage 2) of
   Taxpayer A’s interest in Plan W (now Account U), may transfer, by a direct trustee to trustee transfer, his interest in Account U into another account described in Code § 403(b) set up and maintained in the name of Taxpayer A (deceased) for the benefit of Subtrust V, beneficiary thereof, and payable to Individual D, beneficiary thereof;

5. That Individual D, as a beneficiary of Subtrust V, the beneficiary of [redacted]% of
   Taxpayer A’s IRA X (now IRA Y), may use the life expectancy of the eldest Beneficiary of Subtrust V, Individual C, computed using the “Single Life Table,” which Table is found at § 1.401(a)-9 of the “Final” Income Tax Regulations, Question and Answer-1, for computing the required distribution with respect to his interest in IRA X (now IRA Y) with respect to calendar year [redacted]. Said life expectancy is reduced by one for each calendar year that elapses after [redacted] and

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6. That Individual D, as a beneficiary of Trust T the beneficiary of Taxpayer
   A’s Plan W (now Account U) may use the life expectancy of the eldest Beneficiary of Trust T, Individual G, computed using the “Single Life Table,” which Table is found at § 1.401(a)-9 of the “Final” Income Tax Regulations, Question and Answer-1, for computing the required distributions with respect to his interest in Plan W (now Account U ) with respect to calendar year [redacted]. Said life expectancy is reduced by one for each calendar year that elapses after [redacted].

With respect to your ruling requests, Code section 401(a)(9)(A) provides, in general, that a trust will not be considered qualified unless the plan provides that the entire interest of each employee-

(i) will be distributed to such employee not later than the required beginning date, or

(ii) will be distributed, beginning not later than the required beginning date, over the life of such employee or over the lives of such employee and a designated beneficiary or over a period not extending beyond the life expectancy of such employee or the life expectancy of such employee and a designated beneficiary.

Code § 401(a)(9)(B)(ii) provides, in general, that if a plan participant (IRA holder) dies before the distribution of his interest has begun in accordance with subparagraph (A)(ii) (prior to his required beginning date), then his entire interest must be distributed within 5 years of his death.

Code § 401(a)(9)(B)(iii) provides, in general, that if any portion of the interest of a deceased plan participant (IRA holder) is payable to (or for the benefit of a designated beneficiary), such portion will be distributed beginning not later than 1 year after the date of the deceased’s death (or a later date as prescribed by the Secretary under Regulations) in accordance with regulations over the life of the designated beneficiary (or a period not extending beyond the life expectancy of the beneficiary).

Code § 401(a)(9)(C) provides, in relevant part, that, for purposes of this paragraph, the term "required beginning date" means April 1 of the calendar year following the calendar year in which the employee attains age 70 1/2.

With respect to your ruling requests, “Final” Income Tax Regulations under Code sections 401(a)(9) and 408(a)(6) were published in the Federal Register at 67 Federal Register 18987-19028 (April 17, 2002), and in the Internal Revenue Bulletin at 2002-19 I.R.B. 852 (May 13, 2002). The Preamble to the “Final” Regulations, in relevant part,

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provide that the regulations apply for determining required minimum distributions for

calendar years beginning after [redacted]. For determining required distributions for calendar year [redacted] taxpayers may rely on the 1987 proposed regulations, the 2001 proposed regulations, or the “Final” Regulations..

Section 1.401(a)(9)-3 of the “Final” regulations, Q&A-3(a) provides, in general, that, with respect to the life expectancy exception to the 5-year rule described in Code § 401(a)(9)(B)(iii), and in A-1, distributions are required to begin to a non-spouse beneficiary on or before the end of the calendar year immediately following the calendar year in which the employee died.

Section 1.401(a)(9)-3 of the “Final” regulations, Q&A-4(a), provides, in relevant part, that in the absence of a plan provision to the contrary, with respect to an individual who dies prior to reaching his required beginning date, if said individual has designated a beneficiary, distributions from his plan or IRA are to be made in accordance with the life expectancy rule of Code sections 401(a)(9)(B)(iii) and (iv).

Section 1.401(a)(9)-5 of the “Final” regulations, Q&A-5(b), provides, in general, that if an employee dies before his required beginning date, in order to satisfy the requirements of Code § 401(a)(9)(B)(iii) or (iv) and the life expectancy rule described in A-1 of § 1.401(a)(9)-3, the applicable distribution period for distribution calendar years after the distribution calendar year containing the employee’s date of death is determined in accordance with paragraph (c) of this A-5.

Section 1.401(a)(9)-5 of the “Final” regulations, Q&A-5(c)(1), provides, in general, that, with respect to a non-spouse beneficiary, the applicable distribution period measured by the beneficiary’s remaining life expectancy is determined using the beneficiary’s age as of the beneficiary’s birthday in the calendar year immediately following the calendar year of the employee’s death. In subsequent calendar years, the applicable distribution period is reduced by one for each calendar year that has elapsed after the calendar year immediately following the calendar year of the employee’s death.

Section 1.401(a)(9)-4 of the “Final” regulations, Q&A-1, provides, in relevant part, that a designated beneficiary is an individual who is designated as a beneficiary under a plan either by the terms of the plan or by an affirmative election by the employee. Q&A-1 further provides that a person who takes under a will or otherwise under applicable state law will not be a designated beneficiary unless that individual also takes under a plan.

Section 1.401(a)(9)-5 of the “Final” regulations, Q&A-7(a) provides, in summary, that except as otherwise provided in paragraph (c)of this A-7 (not pertinent to this ruling request), if more than one individual is designated as a beneficiary with respect to an

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employee as of the applicable date for determining the designated beneficiary, the named beneficiary with the shortest life expectancy will be the designated beneficiary for purposes of determining the applicable distribution period.

Section 1.401(a)(9)-4 of the “Final” regulations, Q&A-4, provides, in relevant part, that in order to be a designated beneficiary, an individual must be a beneficiary as of the date of the employee’s death. Generally, an employee’s designated beneficiary will be determined based on the beneficiaries designated as of the date of death who remain beneficiaries as of September 30 of the calendar year following the calendar year of death.

Section 1.401(a)(9)-4 of the “Final” regulations, Q&A-3, provides that only individuals may be designated beneficiaries for purposes of section 401(a)(9). A person who is not an individual, such as the employee's estate, may not be a designated beneficiary. However, Q&A-5 of section 1.401(a)(9)-4 provides that beneficiaries of a trust with respect to the trust's interest in an employee's benefit may be treated as designated beneficiaries if the following requirements are met:

(1) The trust is valid under state law or would be but for the fact that there is no corpus.

(2) The trust is irrevocable or the trust contains language to the effect it becomes irrevocable upon the death of the employee.

(3) The beneficiaries of the trust who are beneficiaries with respect to the trust's interest in the employee's benefit are identifiable within the meaning of A-1 of this section from the trust instrument.

(4) The documentation described in A-6 of this section has been provided to the plan administrator.

Section 1.401(a)(9)-4 of the “Final” regulations, Q&A-6(b), provides, generally, with respect to required minimum distributions after the death of the employee, that documentation described therein must be provided by the trustee of the trust/beneficiary to the plan administrator by October 31 of the calendar year following the calendar year in which the employee died.

Section 1.401(a)(9)-4 of the “Final” regulations, Q&A-5(c), provides, in relevant part, that the separate account rules under A-2 of § 1.401(a)(9)-8 are not available to

beneficiaries of a trust with respect to the trust’s interest in the employee’s benefit.

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Section 1.401(a)(9)-9, of the “Final” Regulations, Q&A-1, sets forth the “Single Life Table” used to compute the life expectancy of an individual.

As previously noted, taxpayers must compute minimum required distributions for calendar years beginning with calendar year [redacted] in accordance with the “Final” regulations referenced above.

Code section 408(a)(6) provides that, under regulations prescribed by the Secretary, rules similar to the rules of section 401(a)(9) and the incidental death benefit requirements of section 401(a) shall apply to the distribution of the entire interest of an individual for whose benefit the trust is maintained.

Code section 403(b)(1) provides, in relevant part, that the amount actually distributed to any distribute under an annuity contract described herein is taxable to the distribute (in the year so distributed) under section 72 (relating to annuities).

Code section 403(b)(10) provides that under regulations prescribed by the Secretary, this subsection shall not apply to any annuity contract (or any custodial account described in paragraph (7) or retirement income account described in paragraph (9)) unless requirements similar to the requirements of sections 401(a)(9) and 401(a)(31) are met (requirements similar to the incidental death benefit requirements of section 401(a) are met) with respect to such annuity contract (or custodial account or retirement income account).

Code § 408(d)(1) provides, generally, that, in accordance with the rules of § 72, amounts paid or distributed from an IRA are included in the gross income by the payee or distributee.

Code § 408(d)(3)(C) provides, generally, that amounts from an “inherited” IRA cannot be rolled over into another IRA. In general, an “inherited” IRA is an IRA maintained by an individual who acquired said IRA by reason of the death of another if the acquiring individual is not the surviving spouse of said other individual. In this case, as noted above, Taxpayer B is Taxpayer A’s nephew.

Code § 402(c)(9) provides, in general, that the rollover provisions of Code section 402(c) apply to a surviving spouse of an employee who receives a distribution from a qualified plan attributable to said employee.

Code section 403(b)(8)(B) provides, in general, that the rules of paragraphs (2) through (7) and (9) of section 402(c) and section 402(f) apply for purposes of paragraph (A) (relating to rollovers of distributions of Code section 403(b) annuities.

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Revenue Ruling 78-406, 1978-2 C.B. 157, provides that the direct transfer of funds from one IRA trustee to another IRA trustee, even if at the behest of the IRA holder, does not constitute a payment or distribution to a participant, payee or distributee as those terms are used in Code § 408(d). Furthermore, such a transfer does not constitute a rollover distribution.

Additionally, a trustee to trustee transfer, as described in Rev. Rul. 78-406, does not constitute a distribution or payment as those terms are defined for purposes of Code § 408(d).

Finally, Rev. Rul. 78-406 is applicable if the trustee to trustee transfer is directed by the beneficiary of an IRA after the death of the IRA owner as long as the transferee IRA is set up and maintained in the name of the deceased IRA owner for the benefit of the beneficiary.

Revenue Ruling 90-24, 1990-1 C.B. 97, provides that that there is no actual distribution within the meaning of Code section 403(b)(1) where funds are transferred from one section 403(b) investment to another section 403(b) investment if the transferred funds continue after the transfer to be subject to any distribution restrictions imposed on them prior to the transfer by section 403(b)(11) or section 403(b)(7)(A)(ii). Rev. Rul. 90-24 also provides that in determining whether any of the transfers referenced therein constitutes an actual distribution, it is irrelevant whether a complete interest or partial interest is transferred, and whether the transferring individual is a current employee, a former employee or a beneficiary of a former employee.

With respect to your first two ruling requests, [redacted]% of Taxpayer A’s IRA X (now IRA Y) was payable to Trust T and allocated to Subtrust V created thereunder. Percentage 2 of Taxpayer A’s interest in Plan W (now Account U) was allocated to Subtrust V. Trust T, and the subtrusts created thereunder, became irrevocable at the death of Taxpayer A. Trust T, and the subtrusts created thereunder, are valid under the laws of State O. A copy of Trust T was timely delivered to Companies L and M. Finally, the identity of the beneficiaries of Trust T and Subtrust V can be determined by perusing their terms. Individual D is a named beneficiary of Subtrust V.

Thus, Trust T, and the subtrusts created thereunder, constitute “see-through trusts” within the meaning of section 1.401(a)(9)-4 of the “Final” Regulations, Q&A-5. As a beneficiary of Subtrust V, the life expectancy of Individual D must be scrutinized in order to determine the life expectancy to be used to compute required distributions from IRA X (now IRA Y) and Plan W (now Account U).

Thus, with respect to your first two ruling requests, we conclude as follows:

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1 That, for purposes of Code section 401(a)(9), Taxpayer A timely named Individual D as a beneficiary of the interest in her IRA X (now IRA Y) payable to Trust T (and allocated to Subtrust V);

2. That, for purposes of Code section 401(a)(9), Taxpayer A
   timely named Individual D as a beneficiary of the percentage (Percentage 2) of her interest in Plan W (now Account U) payable to Trust T.

With respect to your third and fourth ruling request, as noted above, Individual D is one of five beneficiaries of the [redacted]% of Taxpayer A’s IRA X (now IRA Y) allocated to Subtrust V, and one of five beneficiaries of Percentage 2 of Taxpayer A’s interest in Plan W (now Account U) allocated to Subtrust V.

Individual D is not Taxpayer A’s surviving spouse. Thus, Individual D is not eligible to receive a distribution of his interest in either IRA X (now IRA Y) or Plan W (now Account U) and roll over either distribution into an IRA or another section 403(b) account even if the recipient IRA or section 403(b) account is set up in the name of Taxpayer A to benefit Individual D.

However, a trustee-to-trustee transfer does not constitute a distribution. Thus, such a transfer may be accomplished by a beneficiary who is not the surviving spouse of either a deceased IRA owner or a deceased section 403(b) annuitant. Furthermore, a trustee to trustee transfer from one IRA to another, or one 403(b) account to another, may be accomplished after the date of death of an IRA owner or section 403(b) annuitant by a beneficiary of said IRA owner or section 403(b) annuitant as long as the transferee IRA or section 403(b) account remains in the name of the decedent for the benefit of a

beneficiary.

In this case, Individual D intends to accomplish trustee to trustee transfers of his interest in Taxpayer A’s IRA X (now IRA Y) and also of his interest in Taxpayer A’s Plan W (now Account U). Such transfers will be into an IRA maintained in the name of Taxpayer A to benefit Individual D and into a section 403(b) account set up and maintained in the name of Taxpayer A to benefit Individual D respectively.

Thus, with respect to your third and fourth ruling requests, we conclude as follows:

3. That Individual D, as a beneficiary of Trust T’s (Subtrust
   V’s) interest in Taxpayer A’s IRA X (now IRA Y), may transfer, by means of a direct trustee to trustee transfer, his interest in IRA Y into another IRA described in Code § 408(a) set up

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and maintained in the name of Taxpayer A for the benefit of Subtrust V, beneficiary thereof, and payable to Individual D, beneficiary thereof; and

4. That Individual D, as a beneficiary of Subtrust V’s interest
   (Percentage 2) of Taxpayer A’s interest in Plan W (now Account U), may transfer, by a direct trustee to trustee transfer, his interest in Account U into another account described in Code § 403(b) set up and maintained in the name of Taxpayer A (deceased) for the benefit of Subtrust V, beneficiary thereof, and payable to Individual D, beneficiary of Subtrust V thereof.

With respect to your fifth and sixth ruling requests, as noted above, if distributions are made to a trust, even if the trust is a “see-through” trust within the meaning of Q&A-5 of §1.401(a)(9)-4 of the “Final” Regulations, the separate account rules of A-2 of § 1.401(a)(9)-8 of the “Final Regulations” are not available to the beneficiaries of the trust. Thus, in general, each beneficiary of a trust must receive minimum required distributions over the life expectancy of the eldest beneficiary.

For purposes of determining which trust beneficiary’s life expectancy will be used to determine the minimum required distribution payout period, the term “beneficiary”, in general, includes individuals or entities who are not eligible to be treated as “designated beneficiaries” within the meaning of Code section 401(a)(9).

The generic issue raised in your fifth and sixth ruling requests is which Trust T beneficiaries must be considered in determining who is the designated beneficiary of both IRA X (redesignated IRA Y) and Plan W (redesignated Account U).

The specific issue raised with respect to your fifth ruling request is whether, for purposes of Code section 401(a)(9), the life expectancy of Individual G, a beneficiary of Subtrust U but not of Subtrust V, must be considered with respect to the [redacted]% of IRA X (now IRA Y) allocated to Subtrust V. In this regard, we note that although Trust T was the named beneficiary of [redacted]% of said IRA, said [redacted]% was allocated directly to Subtrust V created under the provisions of Trust T by the trustee of Trust T.

As a general rule, if a trust is named as the beneficiary of either a qualified plan or an IRA, all of the beneficiaries of said trust must be considered for purposes of determining who, if anyone, is the designated beneficiary for purposes of Code section 401(a)(9). Thus, under the general rule, the beneficiaries of Subtrust U would have to be considered to determine who is the Code section 401(a)(9) designated beneficiary with respect to the [redacted]% of IRA X (now IRA Y) that was bequeathed by Taxpayer A to Trust T.

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In this case, it has been represented that the [redacted]% of IRA X payable to Trust T was allocated to Subtrust V in order to comply with the statutes of State O. It has also been represented that said allocation occurred prior to September 30, 2002. However, said actions cannot negate the language of Taxpayer A’s beneficiary designation pursuant to which Trust T, and not Subtrust V was the named beneficiary of [redacted]% of his IRA X. The allocation of said 50% of IRA X to Subtrust V was made in accordance with the laws of State O and not in accordance with the beneficiary designation of Taxpayer A and thus falls within the limitations found in section 1.401(a)(9)-4 of the “Final” regulations, Q&A-1.

Therefore, under this specific set of facts, we will apply the general rule set forth above and, for purposes of determining who is the designated beneficiary of the 50% of IRA X (now IRA Y) allocated to Subtrust V, we will consider the beneficiaries of Subtrust V and of Subtrust U. Individual G is the eldest of said beneficiaries.

Thus, with respect to your fifth ruling request, we conclude as follows:

5. That Individual D, as a beneficiary of Subtrust V, the beneficiary of [redacted]% of
   Taxpayer A’s IRA X (now IRA Y), must use the life expectancy of the eldest Beneficiary of Subtrust U, Individual G, computed using the “Single Life Table,” which Table is found at § 1.401(a)-9 of the “Final” Income Tax Regulations, Question and Answer-1, for computing the required distribution with respect to his interest in IRA X (now IRA Y) with respect to calendar year [redacted]. Said life expectancy is reduced by one for each

calendar year that elapses after [redacted].

With respect to your sixth letter ruling request which refers to Plan W (now Account U), we note that Percentage 2 thereof was allocated to Trust T and subsequently reallocated to Subtrust V in order to benefit Individuals B through F. However, such reallocation was accomplished by the trustee(s) of Trust T and was not done by Taxpayer A.

Thus, based on the specific facts and representations surrounding this ruling request, we conclude as follows with respect to your sixth ruling request:

6. That Individual D, as a beneficiary of Trust T the beneficiary of Taxpayer
   A’s Plan W (now Account U) may use the life expectancy of the eldest Beneficiary of Trust T, Individual G, computed using the “Single Life Table,” which Table is found at § 1.401(a)-9 of the “Final” Income Tax Regulations, Question and Answer-1, for computing the required distributions with respect to his interest in Plan W (now Account U ) with

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respect to calendar year [redacted]. Said life expectancy is reduced by one for each calendar year that elapses after [redacted].

This ruling letter is based on the assumption that IRA X and IRA Y either have met, are meeting, or will meet the requirements of Code § 408(a) at all times relevant thereto. It also assumes that Trust T, and Subtrusts U and V created thereunder, are valid under the laws of State O as represented. Finally, it assumes that Plan W (now Account U) constitutes an account described in Code § 403(b).

Pursuant to a power of attorney on file with this office, a copy of this letter ruling is being sent to your authorized representative.

This letter is directed only to the taxpayer that requested it and is based solely on the representations made with respect thereto. Section 6110(j)(3) of the Code provides that it may not be used or cited as precedent.

If you have any questions concerning this letter ruling, please contact
[redacted], Esquire at: 202-283-[redacted] (not a toll-free number) or 202-283-[redacted] (FAX).

Sincerely yours,

Frances V. Sloan, Manager,

Employee Plans
Technical Group 3

Enclosures:

Deleted copy of ruling letter
Notice of Intention to Disclose