5 Yr Rule Re: Nonspouse Bene with Owner Death after RBD
If the IRA owner dies after the RBD (and, consequently, has been taking RMDs for some period of time), my understanding is the nonspouse beneficiary can continue taking RMDs, based on his own age, beginning the year following the year of death. Does the 5-year rule also apply in this case?
Permalink Submitted by Alan - IRA critic on Mon, 2014-02-10 15:49
No, the 5 year rule never applies if owner passes on or after the RBD. You are correct about the beneficiary life expectancy to be used. If there is more than one beneficiary, separate accounts need to be created by each beneficiary by the end of the year following owner’s death. Beneficiaries are also responsible for completing the year of death RMD of the owner if owner did not do so. The year of death RMD will be reportable by the beneficiary.