Can I roll over an inherited IRA to my traditional IRA? Tax implications?

This is actually a pretty serious situation. Non-spouse beneficiaries CANNOT roll over an inherited IRA into their own traditional IRA - this is a fundamental rule in retirement account inheritance. What likely happened is your new advisor made a significant error. When an inherited IRA is incorrectly rolled into a traditional IRA in your name, the IRS typically views this as a full distribution of the inherited IRA (meaning the entire amount becomes taxable income in the year of the transfer) followed by a new contribution to your traditional IRA (which may exceed annual contribution limits). You should contact both financial institutions immediately. This needs to be corrected as soon as possible. The process to fix this would be: 1. Inform both institutions of the error 2. Request they treat this as a mistaken rollover 3. Ask for the funds to be properly transferred to a correctly titled inherited IRA The sooner you address this, the better chance you have of correcting it without major tax consequences. The IRS sometimes allows these mistakes to be fixed if caught and corrected promptly.

After my dad passed and left me his retirement accounts, I was so confused about all the rules and deadlines. I went through three different advisors who all gave conflicting information about RMDs and rollovers. Finally found https://taxr.ai which saved me so much stress! I uploaded my dad's IRA statements and transfer documents, and within minutes got a clear explanation of what I could and couldn't do with an inherited IRA. What I learned is that as a non-spouse, you absolutely cannot roll an inherited IRA into your own traditional IRA - it must stay as an inherited IRA. Your advisor made a serious mistake that could trigger immediate taxation on the entire amount. The service walked me through exactly what documents I needed to fix a similar issue with my accounts before the IRS flagged it.

After seeing the recommendation here, I decided to try https://taxr.ai with my inherited retirement account situation. I was initially just hoping for some general guidance, but was blown away by how helpful it was! I uploaded statements from both my dad's original IRA and the new account my advisor had set up, plus the transfer paperwork. The analysis immediately flagged that my advisor had incorrectly set up a traditional IRA instead of an inherited IRA. The service explained exactly what tax consequences I was facing (the entire $175K would be considered distributed and taxable!) and gave me a specific correction plan. I followed their instructions for contacting both financial institutions, used their template letter explaining the mistake, and requested an "error correction." Both companies acknowledged the mistake and are now processing the correction to properly establish an inherited IRA. The whole process took less than two weeks! Saved me from what would have been a complete tax disaster this year.

I had almost the exact same problem last year with an inherited IRA from my aunt. What made it worse was that I couldn't get anyone on the phone at either financial institution to help fix it. I spent HOURS on hold trying to reach someone who understood inherited IRA rules. After three weeks of frustration, I found https://claimyr.com which got me connected to an actual human at the IRS in less than 20 minutes! You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent explained that this mistake happens frequently and walked me through the correction process. They even sent me an email confirmation I could forward to both financial institutions explaining exactly what needed to be done to fix the improper rollover. Without that official explanation, I'm not sure my financial institutions would have taken the error seriously.

I was extremely skeptical about using any service to connect with the IRS. After my brother-in-law's financial advisor made a similar mistake with his inherited IRA, he spent months trying to get it fixed with no luck. I reluctantly tried https://claimyr.com after seeing it mentioned here. I was shocked when I got a call back with an actual IRS representative on the line within 15 minutes! The agent was incredibly knowledgeable about inherited IRA rules and gave me the exact procedure for correcting an improper rollover. They provided me with specific Internal Revenue Code sections to reference when contacting the financial institutions and explained the "Letter of Instruction" process for requesting the correction. Both financial institutions immediately processed the correction when I mentioned I had consulted directly with the IRS. What I thought would be months of headaches was resolved in just a few days. Wish I hadn't been so skeptical initially!

Just to add some actual tax code info here - this mistake is technically called a "failed rollover" under IRS rules. If you don't get it fixed, it would be treated as a full distribution of the entire inherited IRA amount, which would be added to your taxable income for the year it happened. Plus, since it wasn't properly rolled over to another inherited IRA, you might also face a 10% early withdrawal penalty if you're under 59½. The fix is what's called a "Revenue Procedure 2016-47" correction, which allows for self-certification of a valid reason for a failed rollover. Your financial institution should have forms for this. But honestly, they caused the problem, so they should be bending over backward to fix it for you without charging any fees.

Has your advisor acknowledged the mistake yet? This is a pretty serious error that suggests they either don't understand inherited IRA rules or were careless with your paperwork. Either way, I'd be reconsidering whether this is someone you want managing your money. When I had a similar issue (though caught it before the transfer went through), my advisor tried to blame me for "not being clear enough" about the account type. Don't let them shift responsibility - this is literally their job to know these rules.

Just to give you some peace of mind - I made exactly this mistake last year with my brother's inherited IRA. My financial advisor incorrectly rolled it into a regular IRA in my name. We caught it about 3 months later. We were able to get it fully corrected by having both financial institutions treat it as an "eligible rollover error" and essentially reverse the transaction, then properly set up an inherited IRA. The key was getting both institutions to acknowledge in writing that this was their administrative error, not my intentional action. The whole process took about 6 weeks, but everything was fixed with no tax consequences. Document everything, be persistent, and don't take "we can't fix this" for an answer!

I work in estate planning and see this mistake unfortunately often. Your advisor made a significant error - non-spouse beneficiaries absolutely cannot roll inherited IRAs into their own traditional IRAs. This is one of the most basic rules in retirement account inheritance. The good news is this can definitely be fixed, but you need to act quickly. Here's exactly what you should do: 1. Contact your new advisor immediately and demand they acknowledge this was their error in writing 2. Call both financial institutions (old and new) and explain this was an "administrative error in rollover processing" 3. Request they process this as a "return of mistaken distribution" under Revenue Procedure 2016-47 4. Insist the funds be moved to a properly titled inherited IRA account Since you're within a reasonable timeframe (2 months), most institutions will cooperate to fix this, especially when it's clearly advisor error. Make sure the correction shows the account as "[Your Name] as beneficiary of [Father's Name] IRA" or similar inherited IRA titling. Don't let your advisor blame you or claim this is "just as good" - it's not. An improperly rolled inherited IRA could trigger taxation on the entire balance plus potential penalties. Document every conversation and get all agreements to fix this in writing. If they refuse to help correct their mistake, escalate to their compliance department immediately.