Defer first year RMD if IRA inherited from a deceased spouse?

Submitted by Kevin O'Hearn on Fri, 2023-12-08 14:02

I have a client who is 75 this year. His wife passed away in 2022 and he inherited her IRA into his own IRA that he opened earlier this year. He had no pre-existing IRA or retirement accounts prior to inheriting his wife’s IRA. Since this year would be his first RMD, is he allowed to defer the RMD until April 1, 2024? Or because he is 75, his RBD was April 1, 2019 and so he must take the 2023 RMD by December 31, 2023?



Submitted by Alan - IRA critic on Fri, 2023-12-08 15:22

  • The RBD only applies to the year the client reached 70.5 (born in 1948). Therefore his 2023 RMD is due by 12/31/2023 based on the balance in the inherited IRA on 12/31/2022. He is treated as having owned the IRA for the entire year, so can use the Uniform Table assuming that he elected to assume ownership of the inherited IRA and no distribution was done.
  • However, if client took a distribution from the inherited IRA and did a 60 day rollover to his own IRA, some of that distribution was a beneficiary RMD for 2023 and not eligible for rollover unless wife would not yet have reached RMD age. That would result in a higher beneficiary RMD than if he assumed ownership without a distribution, because the beneficiary RMD is subject to the single life table instead of the Uniform Table. Therefore, the 2023 RMD depends on how the client moved the funds into his own IRA.
  • If wife passed after her RBD and had not completed her 2022 RMD before passing, client was also responsible for completing her 2022 RMD by 4/18/2023. Therefore, wife’s DOB is needed to limit the variables in this answer.

Submitted by Kevin O'Hearn on Fri, 2023-12-08 20:42

Thank you for the response. For clarity, he inherited directly from her IRA to his IRA and she had satisified her 2022 RMD before passing. So we don’t have to worry about the 2022 RMD, only his 2023 RMD.

Submitted by Alan - IRA critic on Fri, 2023-12-08 21:20

OK, then just the first bullet point applies.

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