2019 Inherited IRA using lifetime RMD while skipping 2020
Thanks for the opportunity to ask this specific question.
I inherited an 2 IRAs from my brother in 2019. He passed away 1.31.19 at age 65. I am currently 59 years old. Please let me know if I have this correct?
1) Under ordinary/historical circumstances I would need to take my first RMD in 2020 and I would still be able to use the lifetime distribution (stretch) as he passed away in 2019?
2) I am now able to bypass the 2020 RMD and can take my first RMD in 2021 and most importantly I am still able to use the lifetime distribution (stretch) calculation and not the new Secure Act 10 year rule?
THANKS
Permalink Submitted by Alan - IRA critic on Mon, 2020-07-06 17:29
Yes, you are correct for both statements. Your first beneficiary RMD will be for 2021, and your divisor will start from the Single Life Table for your attained age in 2020 with that divisor reduced by 1.0 for your 2021 RMD divisor. But the IRS has also recommended mortality changes to the tables expected to be effective for 2021. If the tables change, you would then use the above guidelines with the new tables and reduce the would be divisor for 2020 from the new tables by 1.0 to get your 2021 RMD divisor. If approved by the IRS, this should further reduce your beneficiary RMDs by roughly 6%.