Inherited IRA with an Older Beneficiary
I have a client who was born 9/7/1931. He brother passed away 1/17/2021 and she inherited his Traditional IRA. He was born 5/2/1937. Being that she is older than he would have been, would you be able to let me know what her options are in terms of RMDs for 2024? When she dies, what will the options be for the successor beneficiaries?
Permalink Submitted by Alan - IRA critic on Wed, 2024-08-28 14:02
She is an EDB, and must take life expectancy RMDs based on the longer LE of brother. If brother would have been 84 at the end of 2021, the 2022 divisor would be 7.7, 6.7 for 2023, 5.7 for 2024 etc with 1.0 reduction of the divisor each year. When she passes, the successor beneficiary continues with the same divisors she would have had. Since the inherited IRA must be fully distributed by 2029, the 10 year rule will not come into play for the successor.
Also, since he passed on 1/17, there is a good chance that he did not complete his 2021 RMD before passing. In that case, she was responsible for completing his 2021 RMD by 4/15/2022.