Successor Beneficiary of Inherited IRA all before 2020 – SECURE ACT?
I inherited a traditional IRA from my sister (who passed at age 53 in June 2019) who originally inherited the IRA account from my mother (who passed in 2011 at age 69). My mother – the original IRA account owner – was not taking any distributions. My sister, the first beneficiary, was taking here RMDs based on her own life expectancy.
My head is spinning just trying to figure out what, if any, distributions I need to take each year. Any help or guidance would be appreciated.
Thanks,
Tom
Permalink Submitted by Alan - IRA critic on Tue, 2022-11-22 15:26
You fall under the pre Secure Act rules because your sister passed in 2019. As her successor beneficiary you must continue her RMD schedule, but due to new RMD tables adopted this year, your 2022 beneficiary RMD will be slightly less. If your sister would have been 46 at the end of 2012, under the new tables her first beneficiary divisor in 2012 would have been 40.0. Subtract 1.0 for each year after that to 2022 and your 2022 divisor is 30.0. 2023 will be 29.0 etc. The Secure Act does not affect your RMDs. Note that you were responsible for completing her 2019 beneficiary RMD if she did not complete it before passing. 2020 RMDs were waived, but you should have taken a 2021 beneficiary RMD based on the old tables. Your own age is not a factor.
Permalink Submitted by Tom Thumb on Tue, 2022-11-22 20:47
I searched and searched but was unable to find any similar case on point but I could also not imagine I was the only one facing this issue. My IRA custodian’s software did not do the calcs and they did not want to proffer a suggestion. My tax preparer wanted to research this at a cost. Thank you.