Beneficiary traditional IRA from mom and RMD question

Submitted by Rusty Nelson on Sun, 2022-12-04 17:05

I inherited a traditional IRA from my mom who passed away in January 2020. I know the law since the start of 2020 requires that beneficiary traditional IRA’s for non spouses, be depleted in 10 years. However, in this months (December) Kiplinger magazine there is an article that states that RMD’s are required of beneficiary traditional IRA’s, for non spouses. The article states that the IRS has waived the RMD requirement for 2020 and 2021, but 2022 and on, an RMD is required for the 10 year life of the IRA. Is this correct? If it is, how is the RMD calculated each of the 10 years? Is the RMD the total IRA value, with earnings, divided by 10 for each years RMD? Note: I currently need to take RMDs for my own traditional IRA’s BTW, I did not take any funds from the beneficiary IRA in 2020 and 2021. Thanks in advance for help with this.
Rusty Nelson



Submitted by Alan - IRA critic on Sun, 2022-12-04 19:12

  • Based on your age, it is obvious that Mom passed after her RBD, therefore these annual beneficiary RMD will apply to you, most likely starting in 2023.  Because this requirement is technically proposed and not yet final, guidelines generally assume that the Regs will be adopted as written. The IRS has waived these annual RMD for you in 2021 and 2022. There were no RMDs due for 2020 for Mom or you due to the CARES Act. 
  • Even if there were other beneficiaries, if you established your own separate inherited IRA by 12/31/2021 your annual beneficiary RMDs are based on your own life expectancy, RMD table I.  These RMDs would likely be considerably lower than if you took a distribution designed to drain the inherited IRA equally to avoid a large taxable distribution in 2030. If you want to equalize the income, you might take a 2022 distribution of any amount you want just to reduce the distributions in the remaining 8 years. Again, limiting your distributions to just the RMD starting next year would produce a much larger total distribution in year 10.
  • Your actual RMD for 2023 is determined by using the 12/31/2022 inherited IRA balance. The divisor is determined from the new single life table effective in 2022. Determine your age as of 12/31/2021, get the divisor from the new table for that year, then subtract 1.0 from that divisor for each year thereafter. If you want to provide your age on 12/31/2021, I can give you the correct divisors for 2022 and 2023.
  • We are assuming that the waived beneficiary RMDs for 2021 and 2022 will not have to be made up in 2023, that you just have to start these RMDs in 2023. The inherited IRA must be drained by 2030 either way, and waiving the 2021 and 2022 RMDs just means that the distributions will be larger after 2022.

Submitted by Rusty Nelson on Sun, 2022-12-04 19:34

Thanks Alan for your great information.  I assume you meant RMD instead of RBD in the first sentence in your reply, as I don’t know what RBD is.  I am 78 years old.  The IRA isn’t real large, at about 32K.  I have 4 siblings that mom’s IRA was split among, if that makes any difference, which it sounds like it doesn’t.  It would be nice if you post the divisor or max amount I need to withdraw.Thanks again

Submitted by Alan - IRA critic on Sun, 2022-12-04 20:04

  • RBD refers to the “required beginning date” for RMDs. Mom passed well after her RBD, which means that you must take annual beneficiary RMDs within the 10 year rule in years 1-9, but in your case the 2021 and 2021 RMDs were waived by the IRS because they have taken so long to finalize their proposed Regs.
  • If you are 78 now and will still be 78 at the end of this year, you were 77 in 2021.  Your divisor for 2022 is 12.3 if you wanted to withdraw that much, but this is optional because your 2022 beneficiary RMD has been waived. Your 2023 divisor will be 11.3, and your divisor will drop by 1.0 for each year after 2022. Each divisor is divided into the prior year and value of your inherited IRA. You will not know your 2023 RMD until the 12/31/2022 balance is determined. 
  • If you want to move the account to a new custodian, you can only do it with a direct trustee transfer. Any distribution you actually receive is not eligible to be rolled over. Be sure you have named your own beneficiary on your inherited IRA. That beneficiary would only be allowed to complete your 10 year rule, and would not get an additional 10 years. They would also have to complete your annual RMD schedule, so their age would be immaterial.

Submitted by Rusty Nelson on Mon, 2022-12-05 04:33

Alan,I really appreciate your detailed response to my question.  Thank you for providing it. Rusty Nelson

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