Beneficiary IRA switched to regular IRA
83 year old wife dies and leaves spouse(age 86) as beneficiary on traditional IRA. Initially, it is set up as a beneficiary IRA for unknown reason then recently switched to a regular IRA FBO the spouse beneficiary. How is the RMD for the current year done? As a beneficiary IRA – as it was on 12/31/18 or as a regular IRA?
Permalink Submitted by Alan - IRA critic on Fri, 2019-05-31 16:26
If you mean that the surviving spouse elected to assume ownership of the inherited IRA, that is a good thing in this case because his RMDs will be lower and his own beneficiaries will get a stretch based on their own life expectancy rather than his. Check to be sure that the IRA is no longer titled showing him as the beneficiary, but is titled showing his as the owner. If the IRA is still titled in beneficiary form, he should advise the custodian that he elects to be treated as the owner. His 2019 RMD will then be calculated from the Uniform Table using his age as of his birthday this year. Again, in this case there is no downside from assuming ownership of the IRA.