RMD Table Question
Client’s husband died in 1992 at age 57 with an IRA. He would have turned 70 1/2 in 2006. For whatever reason, the widow chose to keep the IRA in his name, fbo herself, and never rolled it to her own IRA. She has not taken any distributions from his IRA.
Questions: Was she supposed to have taken an RMD in 2007 based on the fact that her deceased husband would have turned 70 1/2 in 2006? If so, off of what table? Using what age – his or her’s? 😆
Is it too late for her to convert the IRA to her own IRA and thus use the Uniform Table, instead of Single Life Table? She turned 70 1/2 in 2007.
She doesn’t need the money and wants the lower RMD. But does she even have a choice at this point?
Thank you.
Permalink Submitted by Alan Spross on Tue, 2008-07-29 22:05
Actually, she has now assumed ownership of the IRA be default because she failed to take an RMD that was required on the inherited IRA. So there are no choices left, but this is not a bad outcome because she is better off as owner than continuing as beneficiary.
Her first beneficiary RMD would have been in 2006, the year her husband would have reached 70.5. Since she did not take that RMD, she is deemed to have assumed ownership of the IRA if she was the sole beneficiary. As the owner, her first RMD would have been in 2007 unless she deferred it to 4/1/08, her required beginning date.
She has now passed her RBD also, therefore, she should take the 2007 RMD ASAP and request that the excess accumulation penalty for 2007 be excused using the procedure on p 6 of the Inst for Form 5329. The IRS has been lenient in granting relief from the penalty in most of these cases. She must also take her 2008 RMD prior to year end. These RMDs would be based on her age and the Uniform Table on p 104 of Pub 590. The table age to use is her attained age for each year. In other words, in 2007 she might have been 70 OR 71 at year end.