If you inherit a traditional IRA, it is subject to special rules.

Inherited from spouse. If you inherit a traditional IRA from your deceased spouse, you can generally roll it over into another traditional IRA established for you or you can choose to treat the inherited IRA as your own. You can choose to treat it as your own by designating yourself as the account owner rather than the beneficiary.

You will be considered to have chosen to treat it as your own if:

• Contributions (including rollover contributions) are made to the inherited IRA, or
• Required distributions are not made from it.

You will only be considered to have chosen to treat it as your own if:

• You are the sole beneficiary of the IRA,
• You have an unlimited right to withdraw amounts from it, and
• The distribution of the required minimum amount for the account for the calendar year of the decedent's death has been made.

For distributions after December 31, 2001, your rollover options increase. You may still roll over your spouse's IRA into your traditional IRA, but to the extent a distribution is taxable, you can roll it over into your qualified plan, your qualified employee annuity (section 403(a) annuity), your tax-sheltered annuity (section 403(b) annuity), or your deferred compensation plan of your state or local government (section 457 plan).

Inherited from someone other than spouse. If you inherit a traditional IRA from anyone other than your deceased spouse, you cannot treat the inherited IRA as your own. This means that contributions (including rollover contributions) cannot be made to the IRA and you cannot roll over any amounts out of the inherited IRA. But, like the original owner, you generally will not owe tax on the assets in the IRA until you receive distributions from it. You must begin receiving distributions from the IRA under the rules for distributions that apply to beneficiaries.

More information. For more information about rollovers, required distributions, and inherited IRAs, see:

• Rollovers, later in this chapter under Can I Move Retirement Plan Assets,
• When Must I Withdraw IRA Assets? (Required Distributions), later in this chapter, and
• The discussion of beneficiaries later in this chapter under When Must I Withdraw IRA Assets? (Required Distributions), and the discussion of inherited IRAs under Are Distributions Taxable.

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