Inherited IRA from Dad, RMD, etc.
My 97 year old Dad died and left a small IRA with brother and I as beneficiaries earlier this year. He had not taken his RMD. My understanding is that, once the IRA is split into our inherited IRAs, we must each take 1/2 of his 2018 RMD based on his age. Thereafter (2019), it becomes our inherited IRA. Since we are under 70 1/2, must we take a distributions over 5 years? Or can it just sit there until we reach 70 1/2 ourselves and use our own ages for RMDs.
Permalink Submitted by Alan - IRA critic on Thu, 2018-06-21 22:53
The IRA becomes your immediately upon retitling, and then completion of Dad’s 2018 RMD as owner becomes the joint responsibility of the two of you. For example, if your brother wanted to take a distribution large enough to meet Dad’s RMD, you would not have to take a distribution until your own beneficiary RMD next year. Starting in 2019 each of you will be responsible for your own RMD based on each of your ages. The 5 year rule does not apply, but you will have a beneficiary RMD every year starting in 2019. First, have the IRA retitled and request separate inherited IRA accounts, then coordinate with your brother how Dad’s 2018 RMD will be divided up. Your 2019 beneficiary RMDs will be based on the account balance for each of your separate inherited IRA accounts on 12/31/2018 and Table I applies. The divisor for 2019 is then reduced by 1.0 for each year after that. Dad’s 2018 RMD is the same as if he lived and is calculated using the Uniform Table.