New Single Life Table for Existing Inherited IRAs?
Hi all,
Are inherited IRA owners who established their inherited IRAs before 2022 allowed to retroactively implement the new Single Life Expectancy table?
For example: assume client’s parent passed away in 2017, and client created inherited IRA in 2017. Client began RMDs based on their single life expectancy in 2018 using the Single Life table. For 2022, can client calculate their RMD using the new Single Life Expectancy table by determining what their Single Life Expectancy would have been in 2018 per the new rules, then subtract 4 to get their Life Expectancy divisor for 2022?
Thank you!
Permalink Submitted by Alan - IRA critic on Fri, 2022-02-04 16:33
Yes. Inherited IRA beneficiaries should use the new table starting in 2022 and beyond. Determining the new “reset” divisor requires the beneficiary to check what the first beneficiary year RMD divisor would have been (in 2018) had the new table existed at the time. They then reduce that initial divisor by 1.0 each year to determine the 2022 divisor. Of course, if the beneficiary is subject to the 5 year rule, the above process does not apply and the inherited IRA must be drained by 12/31/2023 (2020 does not count with respect to the 5 year rule).