Beneficiary IRA RMD’s
The way I have always understood it, and the CPA’s my clients have used you use the IRS Single Life Expectancy Table the same way you would use the Uniform Lifetime table:
You see how old the person would be at the end of the year.
You go to the table for that age and get the factor.
For example, when a person is 55, the factor would be 29.6
The next year that person is 56, the factor per the table is 28.7
the next year that person is 57 and the factor is 27.9
an so on
My home office is telling me that it doesn’t work that way. They say that you start with age 55 and factor of 29.6. The next year the factor is 29.6 – 1 = 28.6 and the next would be 28.6 – 1 = 27.6
Which is correct?
Permalink Submitted by Alan - IRA critic on Wed, 2015-04-15 21:25
Home Office is correct for all non spousal beneficiary IRAs. The -1 each year is referred to as “non recalculation” which means the beneficiary does not get the benefit of greater life expectancy for having lived an additional year. However, if the beneficiary is a sole spousal beneficiary who wants to keep the IRA in inherited form, the surviving spouse does not use the 1.0 reduction, instead they go back to the table every year to get a new divisor like you first mentioned.