nonspousal inherited IRA (not from a qualified plan)
Is there a specific deadline date to retitle a nonspousal inherited IRA which is not from an employer qualified plan? When must a beneficiary make an election as to what to do with the amount inherited? If the IRA is rolled over after proper titling will 2009 RMD be required? Whose life expectancy table should be used?
Permalink Submitted by Alan Spross on Mon, 2009-09-21 21:41
2009 RMDs have been waived, but any RMDs from a prior year should still be distributed ASAP. Some beneficiaries are not made aware of the IRA for years after the owner’s death. There is no deadline to re title the account, but the RMD may be affected by any delay.
A recent letter ruling (PLR 2008 11028) allows the beneficiary to maintain the option of lifetime RMDs if they distribute any prior RMDs and pay the excess accumulation penalty for each year. In addition, there is nothing to be lost by appealing the penalty for reasonable cause if there is a good reason for the oversight (see 5329 Inst. for waiver request). The beneficiary’s single life expectancy should be used for the RMDs, and the initial divisor is reduced by 1.0 each year. For example, if the divisor is 19.4 for 2008, and there is no RMD for 2009, the divisor would be 17.4 for 2010.