BDA-IRA Required Minimum Distribution for an account that has been inherited twice

Submitted by Duncan Financial on Mon, 2017-12-04 22:10

We have a client John Doe (Date of Birth 4.27.1951 and Date of Death 7.28.2016) who inherited an IRA from his deceased spouse Jane Doe (Date of Death 5.27.2007 and Date of Birth 8.27.1948). John’s two sons inherited his BDA account and we to know how to calculate their RMD. Do we use Jane’s DOB & DOD and John’s DOB for the life expectancy calculation? Or do we use John’s two sons DOB and John’s DOB & DOD for the calculation?



Submitted by James Magno on Mon, 2017-12-04 22:47

If husband rolled over the IRA to his name after 2007 death of spouse, then the IRA is not considered to be inherited. When husband died in 2016, the single life expectancy table is used based on life of beneficiary-son

Submitted by Alan - IRA critic on Mon, 2017-12-04 22:56

Use the two sons dates of birth.  There is a very helpful rule affecting this fact pattern. Since Jane would not have reached 70.5 until 2019, John was able to maintain the inherited IRA without having to take an RMD before 2019. In this situation, with respect to the RMD for the two sons, they are treated as if they inherited from an IRA owner rather than from a beneficiary. They are therefore treated as designated beneficiaries of John’s inherited IRA and can use their own life expectancies for RMDs rather than using John’s age. They should create separate inherited IRA accounts before year end to allow them each to use their own life expectancy. Their Table I RMD Divisor for their first beneficiary year of 2017 will be based on their ages as of 12/31/2017. That divisor is then reduced by 1.0 for 2018 and each year thereafter. If they do not create the separate accounts by year end, they both will have to use the age of the oldest of the two for RMDs.

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