What rights does the surviving spouse as sole beneficiary of a Traditional IRA have after the death of a spouse?

A surviving spouse who is sole beneficiary of an IRA and has an “unlimited right to withdraw” from it may, at any time after the owner's death, elect to treat the IRA as though he or she were its owner, rather than its beneficiary. The election may only be made if the spouse is the only beneficiary of the IRA and is not available if a trust is a beneficiary, even if the surviving spouse is sole beneficiary of the trust. It may, however, be made by a surviving spouse who rolls over into an IRA a distribution from a qualified plan of a deceased spouse's employer or former employer. Minimum distributions to an electing surviving spouse are determined under the rules for IRA owners, not the rules for beneficiaries, except that the election may not cause there to be a minimum distribution for the year of the owner's death if the owner died before his or her required beginning date. For example, if a surviving spouse is 72 years old when a 68-year-old owner dies, no distribution is required for the year of death, even if the spouse makes the election, even though the spouse's required beginning date occurred before that year. An electing spouse is treated as IRA owner “for all purposes under the Internal Revenue Code,” including the premature withdrawal penalty imposed by Internal Revenue Code Section 72(t) , which generally applies to distributions to owners before age 59 1/2 but does not apply to distributions to beneficiaries.

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