Questions and Answers
One of our customers who had a simplified employee pension (SEP) IRA passed away and left the entire IRA to his wife as sole beneficiary. His wife had us transfer his SEP to her traditional IRA. A few days later she asked if she could transfer it back into a SEP IRA in her name because she plans on running the business that her deceased husband owned. Is that possible?
An individual (or his/her employer) may make a SEP plan contribution to an existing traditional IRA. However, some financial organizations require a separate account, which they title a SEP IRA, to allow them to monitor the SEP contribution limit and to facilitate SEP contribution reporting on IRS Form 5498. A financial organization's policy on SEP contributions will determine whether a separate IRA is necessary for this purpose.
(Posted: 07/18/2007)
