Beneficiary IRA
I have a client whose mother died 12/2004 whose DOB was 7/1926. He inherited the IRA from which she was taking RMD’s. His rollover is titled as a beneficiary IRA. My question is what age do we use for the RMD, hers or his?
I have a client whose mother died 12/2004 whose DOB was 7/1926. He inherited the IRA from which she was taking RMD’s. His rollover is titled as a beneficiary IRA. My question is what age do we use for the RMD, hers or his?
Permalink Submitted by Cary Allen on Mon, 2007-10-15 19:42
He did take 2005 and 2006 RMD but he used his mom’s age, which is what he was advised. Obviously that factor is much higher causing him more tax. When I saw what he was doing that is what prompted my question to you.
She would have been 76 this year and he is 56. You are saying he should us age 56 as his factor correct?
Permalink Submitted by Al Fry on Mon, 2007-10-15 19:58
You look at the factor for his age on December 2005. Then subtract one each year, so for 2007, subtract 2 from the factor. In 2008, subtract one from this year’s factor.
Permalink Submitted by Alan Spross on Tue, 2007-10-16 01:25
The situation where the decedent’s remaining life expectancy produces a lower RMD than the non spouse beneficiary is when the decedent dies after the RBD and has an older beneficiary. That might occur when an older sibling is the non spouse beneficiary, or a very old parent. This could also occur when there are multiple individual beneficiaries with one of them older and separate accounts are not created by the deadline, or for trust beneficiaries who cannot apply the separate account rules.