If the reporter cashed the check for the month of death (and any later months), do not ask for a refund. Advise the reporter that the Treasury Department (TD) may request the funds back from the bank that cashed the check for a period of up to 12 months from the month that SSA learns of the death.
For example, if 5% of your non-Roth IRA are non-deductible contributions, then 5% of the conversion amount must be non-deductible contributions, and the rest must come from the deductible contributions, including earnings and rollover contributions.
But some workers may be able to circumvent the pro rata rule with what financial planner Kevin Reardon calls a 401(k) rollup. If you participate in a 401(k) plan that allows you to roll IRA money into it, you can move all your deductible contributions and any pretax earnings into the 401(k). Because employer plans only accept pretax money, just the nondeductible contributions will be left in your IRA -- and you can do a tax-free conversion to a Roth, says Reardon, founder of Shakespeare Wealth Management, in Pewaukee, Wis.