Internal Revenue Service Department of the Treasury Washington, DC 20224 Number: 202624001 Release Date: 6/12/2026 Index Number: 408.00-00, 401.06-00, 408.06-00
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Third Party Communication: None Date of Communication: Not Applicable Person To Contact: -------------------- , ID No. ----------------- Telephone Number: --------------------- Refer Reply To: CC:EEE:EB:QP1 PLR - 114415-25 Date: February 20, 2026 Legend
Decedent = ---------------------------------------------------------------------------- Taxpayer A = ------------------------------------------------ Taxpayer B = --------------------------------------------------- Taxpayer C = ---------------------------------------------------- State S = ---------------- IRA X = ----------------------------------------------------------- Date 1 = ------------------ Date 2 = -------------------------- Date 3 = ----------------------- Date 4 = ----------------------
Dear ------------- :
This is in response to your request, dated April 1, 2025, for a letter ruling under sections 408 and 401(a)(9) of the Internal Revenue Code (Code).
The following facts and representations have been submitted under penalties of perjury in support of the rulings requested.
Decedent died on Date 2, survived by three children, Taxpayer A, Taxpayer B, and Taxpayer C (Beneficiaries).
Decedent owned IRA X, a traditional individual retirement arrangement (IRA). Decedent had attained the applicable age to begin receiving required minimum distributions from IRA X before death. The custodian for IRA X maintains there is no record of a
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2 beneficiary designation for IRA X. Therefore, Decedent’s estate is treated as the sole beneficiary of IRA X.
On Date 1, Decedent executed a Last Will and Testament naming the Beneficiaries as beneficiaries of IRA X and the other assets in Decedent’s residuary estate, to be divided equally. On Dates 3 and 4, a court in State S admitted Decedent’s will to probate a nd appointed Taxpayer A as the sole executor to administer Decedent’s estate.
As the sole executor, Taxpayer A proposes to divide IRA X into 3 equal parts and transfer each part, by means of trustee-to-trustee transfers, to separate inherited IRAs for the benefit of Taxpayer A, Taxpayer B, and Taxpayer C (Beneficiaries’ Inherited IR As). Each of the Beneficiaries’ Inherited IRAs will be titled “Decedent (Deceased) IRA f/b/o [Beneficiary’s Name] as beneficiary of Decedent's estate.”
Taxpayer A, Taxpayer B, and Taxpayer C will receive required minimum distributions from the Beneficiaries’ Inherited IRAs using Decedent’s remaining life expectancy, until the assets of each inherited IRA are fully withdrawn or dissipated.
This letter assumes that IRA X and the Beneficiaries’ Inherited IRAs satisfy the requirements of § 408 at all relevant times .
Requested Rulings
Based on the above facts and representations, you, through your authorized representative, request the following rulings:
1. As the beneficiaries of Decedent’s interest in IRA X, each Beneficiary’s respective interest in IRA X may be segregated and held in separate IRAs for purposes of determining each Beneficiary’s required minimum distributions under § 401(a)(9).
2. The Beneficiaries’ Inherited IRAs, being titled in Decedent’s name for the benefit of each Beneficiary, funded by means of trustee-to-trustee transfers from IRA X, constitute inherited IRAs under § 408(d)(3).
3. The Beneficiaries may each receive distributions required under § 401(a)(9) from each Beneficiary’s specific inherited IRA (set up in Decedent’s name for the benefit of that Beneficiary, as a beneficiary of Decedent’s estate) over Decedent’s remaining life expectancy.
4. The transfer of each Beneficiary’s respective interest in the estate’s interest in IRA X to the Beneficiaries’ Inherited IRAs will not constitute a taxable distribution within the meaning of § 408(d)(1) to each Beneficiary and does not constitute a rollove r as the term is used in § 408(d)(3).
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3 Law
Under § 408(a)(6) and the regulations thereunder, rules similar to the rules of § 401(a)(9) and the incidental death benefit requirements of § 401(a) apply to the distribution of the entire interest of an individual for whose benefit an IRA is maintained.
Treas. Reg. § 1.408-8(a)(1) provides that an IRA is subject to the required minimum distribution rules under § 401(a)(9). In order to satisfy § 401(a)(9), the rules of § § 1.401(a)(9) - 1 through 1.401(a)(9) - 9 must be applied, except as otherwise provided. Section 1.408-8(a)(3) provides that for purposes of applying the required minimum distribution rules in § 1.401(a)(9) - 1 through 1.401(a)(9) - 9, the IRA trustee, custodian or issuer is treated as the plan administrator, and the IRA owner is substituted for the employee.
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 (a) 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 expect ancy of such employee and a designated beneficiary.
Section 401(a)(9)(B)(i) provides, in general, that if an employee dies after distribution of his interest has begun in accordance with § 401(a)(9)(A)(ii) (after the required beginning date), the remaining portion of his interest must be distributed at leas t as rapidly as under the method of distribution being used as of the date of death.
Section 401(a)(9)(C)(i) provides, in relevant part and for the relevant time period, 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 the ap plicable age (as defined in § 401(a)(9)(C)(v).
Section 401(a)(9)(E)(i) provides that for purposes of § 401(a)(9), the term designated beneficiary means any individual designated as a beneficiary by the employee.
Section 1.401(a)(9) - 4(b) states that a person that is not an individual, such as the employee's estate, is not a designated beneficiary for purposes of § 401(a)(9). If a person other than an individual is a beneficiary designated under the plan, the decede nt will be treated as having no designated beneficiary, even if individuals are also designated as beneficiaries.
Section 1.401(a)(9) - 4(c) 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, a person is a beneficiary taken into account for purposes of § 401(a)( 9) if, as of the date of the employee's death, that person is a beneficiary designated under the
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4 plan who remains a beneficiary as of September 30 of the calendar year following the calendar year of the date of death (that is, has not received the entire benefit to which the beneficiary is entitled before that September 30).
Section 1.401(a)(9) - 5(d)(1)(iii) provides, in summary, that if an employee dies on or after his required beginning date without having a designated beneficiary, then post-death distributions must be made over the applicable remaining life expectancy of the employee determined in accordance with § 1.401(a)(9) - 5(d)(3)(ii).
Section 1.401(a)(9) - 5(d)(3) provides that, for purposes of calculating an employee’s required minimum distributions, all life expectancies are determined using the Single Life Table in § 1.401(a)(9) - 9(b) . Under § 1.401(a)(9) - 5(d)(3)(ii), the employee's remaining life expectancy is determined initially using the employee's age as of the employee's birthday in the calendar year of the employee's death. In subsequent calendar years, the remaining life expectancy is d etermined by reducing that initial life expectancy by one for each calendar year that has elapsed after that first calendar year.
Section 1.401(a)(9) - 8(a)(1)(i) provides that § 401(a)(9) is applied separately with respect to the separate interests of each of the employee's beneficiaries under the plan provided that those interests are held in separate accounts that satisfy the separa te accounting requirements. Under § 1.401(a)(9) - 8(a)(2)(ii), a separate accounting satisfies the requirements if all post-death investment gains and losses, contributions, forfeitures, and expenses for the period prior to the establishment of the separate accounts are allocated on a pro rata basis in a reasonable and consistent manner among the separate accounts. The separate accounting does not fail to satisfy the separate accounting requirements because, in lieu of a pro rata allocation of investment gain s and losses (A) separate accounts are established that have separate investments; and (B) the investment gains and losses attributable to assets held in each of those separate accounts are allocated only to that separate account.
The relevant Single Life Table determining life expectancy is provided in § 1.401(a)(9) - 9(b).
Section 408(d)(1) provides that, except as otherwise provided in § 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 § 72.
Section 408(d)(3)(A) provides that § 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 retireme nt 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
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5 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 § 408(d)(3)).
Section 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 the IRA by reason of the death of another individual if the acquiring individual is not the surviving spouse of the other individual.
Section 408(d)(3)(E) provides that the rollover provisions of § 408(d) do not apply to any amount required to be distributed under § 408(a)(6) (regarding required minimum distributions under § 401(a)(9)).
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 distribute, as those terms are used in § 408(d). Furthermore, such a transfer does not constitute a rollover distribution. Revenue Ruling 78-406 specifically applies in the case of a transfer by the original IRA owner from one IRA titled in the IRA owner's name to anoth er IRA titled in the same manner.
Rulings
The rules discussed above will apply to your ruling requests as follows:
1. As the beneficiaries of Decedent’s interest in IRA X, each Beneficiary’s respective interest in IRA X may be segregated and held in separate IRAs for purposes of determining each Beneficiary’s required minimum distributions under § 401(a)(9).
2. The Beneficiaries’ Inherited IRAs, being titled in Decedent’s name for the benefit of each Beneficiary, funded by means of trustee-to-trustee transfers from IRA X, constitute inherited IRAs under § 408(d)(3).
3. The Beneficiaries may each receive distributions required under § 401(a)(9) from each Beneficiary’s specific inherited IRA (set up in Decedent’s name for the benefit of that Beneficiary, as a beneficiary of Decedent’s estate) over Decedent’s remaining life expectancy.
4. The transfer of each Beneficiary’s respective interest in the estate’s interest in IRA X to the Beneficiaries’ Inherited IRAs will not constitute a taxable distribution within the meaning of § 408(d)(1) to each Beneficiary and does not constitute a rollove r as the term is used in § 408(d)(3).
The rulings contained in this letter are based upon information and representations submitted by Taxpayer A and accompanied by a penalty of perjury statement executed
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6 by Taxpayer A, as specified in Rev. Proc. 2026-1, 2026-1 I.R.B. 1, § 7.01(16)(b). While this office has not verified any of the material submitted in support of the request for rulings, it is subject to verification on examination. The Associate office wil l 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 wa s based, or, in the case of a transaction involving a continuing action or series of actions, the controlling facts materially 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) of the Code 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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