Table to use on Inherited IRA in 2008

Submitted by Bill Balyszak on Wed, 2023-02-01 21:32

A man inherited an IRA from his brother age 86, who was getting RMDs at time of death,
What Table should one use, age 83, use for the 2023 RMD? This IRA was inherited prior to the Secure Act.
In the “1040 Quickfinder Handbook” under “Computing Life Expectancy Payouts” it states the following:
*Deceased Owner’s remaining life expectancy:
“The distribution period for the year following the year of death is from the “Single Life Table” for the DECEASED OWNER’S AGE at the end of the year of death, reduced by one. The distribution period in each successive year is reduced by one for each year that has elapsed.”
Whose age should one use the IRS Table going forward? That sentence above “..DECEASED OWNER’S AGE” doesn’t make sense, but then, it’s the IRS, right?



Submitted by Alan - IRA critic on Wed, 2023-02-01 21:50

The deceased owner’s age would only apply if the beneficiary was older. In this case, assuming that the beneficiary was the sole beneficiary or created a separate inherited IRA account by 12/31/2009, the new single life table effective in 2022 would be used to reset the divisors. Therefore if beneficiary reaches 83 this year (2023), they would have been 69 in 2009. The new table divisor would have been 19.6 in 2009, then subtract 1.0 for each year since and the result is a 2023 divisor of 5.6. Please advise if my assumptions on age are incorrect.

Submitted by Bill Balyszak on Wed, 2023-02-01 23:10

First, thank you for the reply that” The deceased owner’s age would only apply if the beneficiary was older.” This now makes sense.It appears that you used Table III and an age of 102 to get your devisor of 5.6, which I don’t believe we should use, right? Or am I missing something, again?Shouldn’t we use Table I (Single Life Expectancy, for use by Beneficiaries) with the age of the beneficiary in 2023 will be 84, which shows a divisor or 8.7?Thanks again…Bill 

Submitted by Alan - IRA critic on Wed, 2023-02-01 23:56

I used the single life table, but the divisor assumed beneficiary was 69 in 2009. SInce the beneficiary would have been 70 in 2009 instead, the correct 2009 adjusted divisor starts at 18.8. Subtracting 1.0 for each year since 2009 results in a 2023 beneficiary divisor of 4.8. You cannot simply go the table for age 84, you must start back in 2009 with that divisor and then reduce it by 14. For all those years since 2010 the initial divisor should have been reduced by 1.0 each year. Going directly to the table would have produced an incorrect divisor and an RMD shortfall. 

Submitted by Bill Balyszak on Thu, 2023-02-02 02:11

Many thanks for your understanding and enlightening me on the correct methodology.In that the owner did not calculate the devisor but the mutual fund and/or clearing firm(s) did,  I would venture to guess that these previous RMDs were not calculated correctly and my bet is that 90+% of current and past beneficiary IRA RMDs were wrong too. These mutual funds and clearing firms should know better, based on the army of people they have working for them.Thank you again for your follow-the-yellow-brick-road clarifications. BB

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