By Sarah Brenner, JD
Director of Retirement Education
Question:
Dear IRA Help,
Here is my specific case.
I am 84 years old.
I opened a Roth IRA on March 30, 2020, with a conversion.
I started withdrawing from this conversion on March 10, 2025.
Did I satisfy the requirements to have a qualified distribution?
My brokerage firm is saying that they will not report this distribution on Form 1099-R, using Code Q, for a qualified distribution.
Please clarify this for me. Will be greatly appreciated.
Thanks,
Thakor
Answer:
Hi Thakor,
You did meet the requirements for a qualified distribution. You are over age 59½ and you have satisfied the five-year holding period. The five-year holding period began on January 1, 2020, and ends on January 1, 2025.
The brokerage firm may be using Code T instead of Code Q. According to the instructions for Form 1099-R, Code T is used when the IRA custodian does not know if the 5-year holding period has been met but:
- The participant has reached age 59½,
- The participant died, or
- The participant is disabled.
Some custodians make it a practice to use Code T instead of Code Q. This will not affect the taxation of the distribution. You can handle the Roth IRA distribution as qualified distribution on your tax return.
Question:
We have a client who is the successor beneficiary of an IRA that her late husband had inherited from his deceased mother. The mother died in 2015. The deceased husband had been taking annual required minimum distributions (RMDs) since he inherited the IRA. Now, the wife is the successor beneficiary. Can she do a spousal rollover since she inherited this account from her husband?
Answer:
The wife cannot do a spousal rollover. This is because she is a successor beneficiary of an account inherited by her husband. She would only be able to do a spousal rollover if she inherited his own IRA. Instead, as a successor beneficiary, she will need to continue annual RMDs based on her husband’s life expectancy. In addition, the SECURE Act’s 10-year rule will also apply.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.