Inherited IRA distribution

Submitted by John LaGrange on Fri, 2014-12-05 18:37

Son inherits IRA from Mom in 2010; Mom was over 70.5 and receiving RMD. Son 41, was 50/50 with sister, 44. Son did not set up inherited IRA and transfer his share from Mom’s IRA until 2012. What distribution rule applies?



Submitted by Alan - IRA critic on Fri, 2014-12-05 19:33

When did sister transfer her share  to an inherited IRA?



Submitted by mk foss on Fri, 2015-01-02 23:04

There are a number of issues presented here:

  1. If Mom died in 2010 – an RMD was due for her that year. Either son or daughter could take it; a 50% penalty is possible if no one took the distribution.
  2. Both son and daughter were to take an RMD in 2011. If daugher set up an inherited IRA for her share before 12/31/12 – son would have a missed RMD based on his age in 2012 and the remaining IRA balance using the sinlge life table.
  3. If sister’s inherited IRA was established after 12/31/12 – they both were required to take a 2012 RMD based on sister’s age in 2012.
  4. Nonspouse beneficiaries (when original owner was over 70.5 and taking distributions) always use the single life table and the balance the previous 12/31 to determine the RMD. The table is consulted for the year after the death and the factor for the beneficiaries age is reduced by 1.0 for subsequent year RMDs.

 



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