Surviving spouse may roll over an IRA that passed through the estate and trust into her own IRA

Plain-English summary

When someone dies with a traditional IRA, a surviving spouse can usually take
the money and roll it into their own IRA, keeping it tax-deferred. That is easy
when the spouse is the named beneficiary, but here the IRA passed a longer way:
the named beneficiary (the deceased's mother) had already died, so the account
went to the estate, and under the will the estate's assets flowed into a trust.
The surviving spouse is the sole administrator of the estate and the sole trustee
and beneficiary of the trust, with full power to withdraw everything. The IRS
ruled that, because she effectively controls the money, she is treated as the
person the IRA is paid to. As a result, the IRA is not an "inherited IRA" (which
could not be rolled over), and she may roll the proceeds into an IRA in her own
name, as long as she does so within 60 days of receiving the distribution as
trustee. If she meets that deadline, none of the rolled-over amount is taxable,
except to the extent she rolls it into a Roth IRA. Required minimum
distributions still cannot be rolled over.

Ruling snapshot

• Question: May a surviving spouse who controls the estate and trust that received the IRA roll it over into her own IRA tax-free?
• Outcome: Approved (all four requested rulings granted)
• Key authorities: IRC §§ 408(d)(1), 408(d)(3), 408(d)(3)(C) (inherited IRA), 408A(d)(3), 401(a)(9); Treas. Reg. § 1.408-8(c)(1); IRC § 6110(k)(3)

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 202621003
Release Date: 5/22/2026
Index Number: 408.00-00, 408.03-00

Third Party Communication: None
Date of Communication: Not Applicable

Person To Contact:
--------------------, ID No. -----------------
Telephone Number:

Refer Reply To:
CC:EEE:EB:QP1
PLR-114545-25
Date:
February 20, 2026

Legend:

Decedent = -----------------------
Taxpayer = -----------------------------------------------
Estate = ------------------------------------
Trust = -----------------------------------------------------------------
State = -------------
IRA X = -----------------------------------------------------------------------
Date 1 = -------------------------
Date 2 = ----------------
Date 3 = --------------------------
Date 4 = --------------------------
Date 5 = --------------------------
Date 6 = --------------------

Dear --------------:

This is in response to a request for a letter ruling under sections 408(d)(1) and (d)(3) of the Internal Revenue Code, submitted on your behalf by your authorized representative in correspondence dated June 4, 2025, and updated by correspondence dated August 26, 2025, and December 26, 2025.

The following facts and representations have been submitted under penalties of perjury in support of the requested rulings.

Decedent executed a Last Will and Testament and a trust on Date 2, naming Taxpayer, Decedent's surviving spouse, as executor of Decedent's estate (Estate) and Decedent and Taxpayer as trustees of Decedent's trust (Trust).

Decedent was the owner of a traditional Individual Retirement Account (IRA), IRA X. Decedent had named Decedent's mother as primary beneficiary of IRA X and Estate as contingent beneficiary. Decedent's mother died on Date 1, before Decedent's death on Date 3, leaving Estate as the sole beneficiary of IRA X.

On Date 4, a State court admitted Decedent's will to probate and, on Date 5, appointed Taxpayer as sole administrator of Estate.

Under the terms of Decedent's will, Estate's residue (including IRA X) was bequeathed to Trust. On Date 6, the State court directed IRA X and other Estate assets to be transferred to Trust. Under the terms of Trust, upon the Decedent's death, Taxpayer became the sole trustee and has the right to withdraw any part of the Trust's assets in her sole discretion as trustee and beneficiary of Trust.

As sole administrator of Estate and sole trustee of Trust, Taxpayer intends to distribute the proceeds of IRA X to Taxpayer and, within 60 days of receipt, roll over the distribution to one or more IRAs held in Taxpayer's name.

Requested Rulings

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

1. Taxpayer will be treated for purposes of section 408(d)(1) and (d)(3) as the payee or distributee of the proceeds from IRA X.

2. IRA X will not be treated as an inherited IRA within the meaning of IRC Section 408(d) with respect to Taxpayer.

3. Taxpayer is eligible to roll over IRA X into an IRA set up and maintained in Taxpayer's own name as long as the rollover of that distribution occurs no later than the 60th day after the date the distribution is received by Taxpayer as trustee of Trust.

4. Taxpayer will not be required to include in gross income for federal income tax purposes, for the year in which the distribution of IRA X and subsequent rollover is made, any portion of the amounts from IRA X received by Trust and timely rolled over into one or more IRAs set up and maintained in Taxpayer's name.

Law

Section 408(d)(1) provides that, except as otherwise provided in section 408(d), any amount paid or distributed out of an IRA shall be included in gross income by the payee or distributee, as the case may be, in the manner provided under section 72.

Section 408(d)(3)(A) provides that section 408(d)(1) does not apply to any amount paid or distributed out of an IRA to the individual for whose benefit the IRA is maintained if: (i) the entire amount received (including money and any other property) is paid into an IRA for the benefit of such individual not later than the 60th day after the day on which the individual receives the payment or distribution; or (ii) the entire amount received (including money and any other property) is paid into an eligible retirement plan (other than an IRA) for the benefit of such individual not later than the 60th day after the date on which the payment or distribution is received, except that the maximum amount which may be paid into such plan may not exceed the portion of the amount received which is includible in gross income (determined without regard to section 408(d)(3)).

Section 408(d)(3)(B) provides that section 408(d)(3) does not apply to any amount described in section 408(d)(3)(A)(i) received by an individual from an IRA if at any time during the 1-year period ending on the day of such receipt such individual received any other amount described in section 408(d)(3)(A)(i) from an IRA which was not includible in gross income because of the application of section 408(d)(3).

Section 408(d)(3)(C)(i) provides that in the case of an inherited IRA, section 408(d)(3) shall not apply to any amount received by an individual from such account (and no amount transferred from such account to another IRA shall be excluded from income by reason of such transfer), and such inherited account shall not be treated as an IRA for purposes of determining whether any other amount is a rollover contribution.

Section 408(d)(3)(C)(ii) provides that the term "inherited IRA" means an IRA acquired by an individual, other than the IRA owner's spouse, as a result of the death of the IRA owner.

Section 408(d)(3)(D) permits the rollover of a portion of the amount paid or distributed from an IRA, providing that if the amount paid or distributed out of an IRA would meet the requirements of subparagraph (A) but for the fact that the entire amount was not paid into an eligible plan, such amount shall be treated as meeting the requirements of subparagraph (A) to the extent it is paid into an eligible plan within the applicable 60 day period.

Section 408(d)(3)(E) provides that the rollover provisions of section 408(d) do not apply to any amount required to be distributed under section 408(a)(6) (regarding required minimum distributions under section 401(a)(9)).

Section 408A(d)(3) contains a special rule that applies for a rollover to a Roth IRA from a non-Roth IRA, which provides in part that, notwithstanding section 408(d)(3), there shall be included in gross income any amount which would be includible were it not part of a qualified rollover contribution.

Section 1.408-8(c)(1) provides, in part, that a surviving spouse of an individual may elect to treat the spouse's entire interest as a beneficiary in the individual's IRA as the spouse's own IRA. In order to make this election, the spouse must be the sole beneficiary of the IRA and have an unlimited right to withdraw amounts from the IRA.

Analysis

Under the facts presented, the IRA X assets remaining at Decedent's death are payable to Estate. Taxpayer, as Decedent's surviving spouse, is not permitted to treat IRA X as Taxpayer's own IRA because Estate is the beneficiary of IRA X.

By order of the State court, the IRA X assets held in Estate are to be transferred to Trust. Because Taxpayer is the sole trustee of Trust and has the authority to distribute all of Trust's assets, for purposes of applying section 408(d)(3)(A), Taxpayer is effectively the individual for whose benefit IRA X is maintained. Accordingly, if Taxpayer receives a distribution of IRA X's proceeds, Taxpayer may roll over the distribution (other than amounts required to have been distributed or to be distributed in accordance with section 401(a)(9)) into one or more IRAs established and maintained in Taxpayer's name.

Therefore, with respect to your first ruling request, the IRA X proceeds that are paid to Trust and then received by Taxpayer and timely rolled over to an IRA or IRAs set up and maintained in Taxpayer's name may be treated as paid or distributed to Taxpayer under sections 408(d)(1) and (d)(3).

With respect to your second ruling request, Taxpayer is the surviving spouse of Decedent. Therefore, IRA X is not treated as an inherited IRA for purposes of section 408(d)(3).

With respect to your third ruling request, as concluded above, Taxpayer may roll over the IRA X proceeds paid to Trust and then received by Taxpayer to an IRA or IRAs set up and maintained in Taxpayer's name, provided that the rollover occurs no later than the 60th day after the day the proceeds are received by Taxpayer as trustee of Trust.

With respect to your fourth ruling request, except in the case of a rollover to a Roth IRA, Taxpayer will not be required to include in Taxpayer's gross income any portion of the IRA X proceeds timely rolled over to an IRA set up and maintained in Taxpayer's name.

Rulings

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

1. Taxpayer will be treated for purposes of section 408(d)(1) and (d)(3) as the payee or distributee of the proceeds from IRA X.

2. IRA X will not be treated as an inherited IRA within the meaning of IRC Section 408(d) with respect to Taxpayer.

3. Taxpayer is eligible to roll over a distribution of proceeds (other than amounts that are required minimum distributions) from IRA X to an IRA set up and maintained in Taxpayer's own name as long as the rollover of that distribution occurs no later than the 60th day after the date the distribution is received by Taxpayer as trustee of Trust.

4. Except in the case of a rollover to a Roth IRA, Taxpayer will not be required to include in gross income for federal income tax purposes, for the year in which the distribution of IRA X and subsequent rollover is made, any portion of the amounts from IRA X received by Trust and timely rolled over into one or more IRAs set up and maintained in Taxpayer's name.

This letter assumes that IRA X has satisfied the requirements of section 408 at all relevant times. It also assumes that the rollover IRA or IRAs set up by Taxpayer will satisfy the requirements of section 408 at all relevant times.

The rulings contained in this letter are based upon information and representations submitted by Taxpayer and accompanied by a penalties of perjury statement executed by Taxpayer, as specified in Rev. Proc. 2026-1, 2026-1 I.R.B. 1, § 7.01(16)(b). This office has not verified any of the material submitted in support of the request for ruling, and such material is subject to verification on examination. The Associate office will revoke or modify a letter ruling and apply the revocation retroactively if there has been a misstatement or omission of controlling facts; the facts at the time of the transaction are materially different from the controlling facts on which the ruling was based; or, in the case of a transaction involving a continuing action or series of actions, the controlling facts change during the course of the transaction. See Rev. Proc. 2026-1, § 11.05.

Except as expressly provided above, no opinion is expressed or implied concerning the federal income tax consequences of any other aspects of any transaction or item of income described in this letter ruling.

This letter is directed only to the taxpayer requesting it. Section 6110(k)(3) provides that it may not be used or cited as precedent.

In accordance with the Power of Attorney on file with this office, a copy of this letter is being sent to your authorized representative.

Sincerely,

/s/ Neil S. Sandhu

Neil S. Sandhu
Senior Technician Reviewer
Qualified Plans Branch 1
Office of the Associate Chief Counsel
(Employee Benefits, Exempt Organizations, and Employment Taxes)

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