[Code of Federal Regulations]
[Title 26, Volume 5]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.408A-2]

[Page 506-507]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.408A-2  Establishing Roth IRAs.

    This section sets forth the following questions and answers that 
provide rules applicable to establishing Roth IRAs:
    Q-1. Who can establish a Roth IRA?
    A-1. Except as provided in A-3 of this section, only an individual 
can establish a Roth IRA. In addition, in order to be eligible to 
contribute to a Roth IRA for a particular year, an individual must 
satisfy certain compensation requirements and adjusted gross income 
limits (see Sec. 1.408A-3 A-3).
    Q-2. How is a Roth IRA established?
    A-2. A Roth IRA can be established with any bank, insurance company, 
or other person authorized in accordance with Sec. 1.408-2(e) to serve 
as a trustee with respect to IRAs. The document establishing the Roth 
IRA must clearly designate the IRA as a Roth IRA, and this designation 
cannot be changed at a later date. Thus, an IRA that is designated as a 
Roth IRA cannot later be treated as a traditional IRA. However, see 
Sec. 1.408A-4 A-1(b)(3) for certain rules for converting a traditional 
IRA to a Roth IRA with the same trustee by redesignating the traditional 
IRA as a Roth IRA, and see Sec. 1.408A-5 for rules for recharacterizing 
certain IRA contributions.
    Q-3. Can an employer or an association of employees establish a Roth 
IRA to hold contributions of employees or members?
    A-3. Yes. Pursuant to section 408(c), an employer or an association 
of employees can establish a trust to hold contributions of employees or 
members made under a Roth IRA. Each employee's or member's account in 
the trust is treated as a separate Roth IRA that is subject to the 
generally applicable Roth IRA rules. The employer or association of 
employees may do certain acts otherwise required by an individual, for 
example, establishing and designating a trust as a Roth IRA.
    Q-4. What is the effect of a surviving spouse of a Roth IRA owner 
treating an IRA as his or her own?
    A-4. If the surviving spouse of a Roth IRA owner treats a Roth IRA 
as his or her own as of a date, the Roth IRA is treated from that date 
forward as though it were established for the benefit of the surviving 
spouse and not the original Roth IRA owner. Thus, for example, the 
surviving spouse is treated as the Roth IRA owner for purposes of

[[Page 507]]

applying the minimum distribution requirements under section 408(a)(6) 
and (b)(3). Similarly, the surviving spouse is treated as the Roth IRA 
owner rather than a beneficiary for purposes of determining the amount 
of any distribution from the Roth IRA that is includible in gross income 
and whether the distribution is subject to the 10-percent additional tax 
under section 72(t).

[T.D. 8816, 64 FR 5601, Feb. 4, 1999]