10 Year Rule Proposed Regs: Years 1-9 Life Expectancy Payments

Submitted by Jake Corum on Fri, 2023-05-12 17:04

For Designated Beneficiaries subject to 10 yr rule when original IRA owner was in RMD status:

Life Expectancy Payments Years 1-9: Is the beneficiary’s single life expectancy calculation method recalculated or non-recalculated (reduced by 1 each year)? For an example, let’s say original IRA owner passed in 2021 at age 85, & the beneficiary’s attained age in 2022 is 62. Under the proposed rules, what calculation would be used for year 1 (2022), and what calculation method is used for years 2-9?



Submitted by Alan - IRA critic on Fri, 2023-05-12 18:04

Assuming a sole non spouse beneficiary, the single life table divisor for age 62 would apply for 2022, and that divisor would be reduced by 1.0 (non recalc) each year through year 9, and the balance drained in year 10.

Submitted by Jay Wiedwald on Fri, 2023-05-12 21:56

Would the answer be any different if there were multiple non-spouse beneficiaries sharing the IRA? All are younger than the deceased and none are EDB’s.

Submitted by Alan - IRA critic on Fri, 2023-05-12 22:23

Yes, the separate account rules would come into play. For those who did not create separate inherited IRA accounts by the end of the year following the year of death, the age of the oldest such beneficiary would apply to all beneficiaries that did not establish separate inherited accounts by this deadline. These rules were not affected by the Secure Act. Alternatively, any beneficiary that disclaimed or took a full distribution by 9/30 of the following year is not considered in determining the divisor for the remaining beneficiaries.

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