If a traditional IRA is inherited from a spouse, the surviving spouse generally has the following three choices:
- Treat it as his or her own IRA by designating himself or herself as the account owner.
- Treat it as his or her own by rolling it over into a traditional IRA, or to the extent it is taxable, into a:
a. Qualified employer plan,
b. Qualified employee annuity plan (section 403(a) plan),
c. Tax-sheltered annuity plan (section 403(b) plan),
d. Deferred compensation plan of a state or local government (section 457(b) plan), or
3. Treat himself or herself as the beneficiary rather than treating the IRA as his or her own.
If a surviving spouse receives a distribution from his or her deceased spouse's IRA, it can be rolled over into an IRA of the surviving spouse within the 60-day time limit, as long as the distribution is not a required distribution, even if the surviving spouse is not the sole beneficiary of his or her deceased spouse's IRA.
