Bene RMDs calculations and 2023
A client, DOB 10/15/33, passed in 2021 with a T-IRA. All beneficiaries are non spouse. DOB are below:
8/10/61
11/1/86
8/12/88
6/24/95
7/31/97
How do we handle the RMDs for each beneficiary? which table should be used?
And what is your take on RMD requirements for 2023?
thank you.
Permalink Submitted by Alan - IRA critic on Thu, 2023-08-24 14:13
Were separate inherited IRA accounts for each beneficiay established by 12/31/2022? If not by all, which ones? Are any of the beneficiaries disabled or chronically ill as of the DOD? If not, the 10 year rule applies, but annual RMDs have been waived by the IRS for 2022 and 2023, but will likely have to start in 2024, with the inherited IRAs drained in 2031. The single life table will apply, but the age depends on separate account establishment dates. Also, note that the decedent’s 2021 RMD if not taken by decedent had to be completed by the beneficiaries in any combination. Was that done?
Permalink Submitted by Teresa Hettinger on Fri, 2023-08-25 20:56
Yes, separate inherited IRAs opened in 2021, for each bene. no disabled or ill bene’s. so use the single life table based on teh account open date and assuming the year of death RMD was taken, no worries on 2022-23. 2024 remains to be seen, but either way the accounts need to be fully distributed by end of 2031. each of them. no differnce between bene’s.correct?
Permalink Submitted by Alan - IRA critic on Fri, 2023-08-25 21:45
The single life table divisor for each beneficiary is based on their respective ages in 2022. Those divisors are reduced by 1.0 each year thereafter, but with the 2022 and 2023 (years 1 and 2) RMDs waived, the first beneficiary RMD is assumed to be in 2024 using a divisor of 2.0 less than what the 2022 divisor would have been. All inherited IRAs must be drained in 2031, although that oldest beneficiary would have taken out much more in years 3-9 than the younger ones with the younger ones thereby facing a larger distribution in 2031.