Federal Tax Day - Current, L.2, Code Sec. 401: IRS Rules on Beneficiaries’ Interest in IRA and More (LTR 202624001), (Jun 15, 2026)

A decedent’s individual retirement account (IRA 1) had multiple beneficiaries. The IRS ruled that each beneficiary’s interest in IRA 1 could be segregated and held in separate IRAs. This would determine each beneficiary’s required minimum distributions under Code Sec. 401(a)(9).

Next, the Service ruled that the beneficiaries’ inherited IRAs were being titled in the decedent’s name for the benefit of each beneficiary. They were also funded by means of trustee-to-trustee transfers from IRA 1.

Thirdly, each beneficiary would receive distributions under Code Sec. 401(a)(9) from each beneficiary’s specific inherited IRA over the decedent’s remaining life expectancy. All life expectancies would be determined using the single life table in Reg. §1.401(a)(9)-9(b).

Finally, the transfer of each beneficiary’s respective interest in the estate’s interest in IRA 1 to the inherited IRAs was not a taxable distribution under Code Sec. 408(d)(1). Said transfer was also not a rollover under Code Sec. 408(d)(3). The rollover provisions did not apply to any amount required to be distributed under Code Sec. 408(a)(6).

IRS Letter Ruling 202624001