How to actually calculate RMD from inherited IRA?
IRA owner died in 2022 at age 85 after taking her 2022 RMD. IRA owner’s daughter was designated as the 100% beneficiary and was 54 at the end of 2022. We’re assuming RMDs must continue because the deceased was required to take RMDs.
For the 2023 RMD, does the daughter divide the 12/31/2022 IRA balance by the Table I life expectancy of 32.5 for age 54, and in future years subtract one from 32.5 until the end of year ten (12/31/2032) when the remaining balance must be fully distributed?
Permalink Submitted by Alan - IRA critic on Sun, 2023-07-02 20:40
Because daughter will reach 55 in 2023, her 2023 RMD divisor will be 31.6 and that divisor will be reduced by 1.0 for each year after 2023. However, if daughter wishes to avoid a large taxable distribution in 2032, she will have to take out more than just the annual RMD amount.
Permalink Submitted by Dan Simonds on Sun, 2023-07-02 21:21
Thank you Alan! Very helpful. If you wrote for the IRS, there would be much less confusion.