Stretch IRA and Non-Recalculation Method
The IRS website has this to say about non-spouse beneficiaries:
“Non-spouse beneficiary options
If the account holder’s death occurred prior to the required beginning date (or if the account is a Roth IRA), the non-spouse beneficiary’s options are:
Take distributions based on their own life expectancy, beginning the end of the year following the year of death
Follow the 5-year rule”
However, I thought these individuals were subject to the non-recalculation method which meant they couldn’t base it on their life expectancy after the first year. Can you help clarify for me? Thanks.
Permalink Submitted by Alan - IRA critic on Tue, 2024-01-23 00:10
Per your other post, you are referring to a pre Secure Act death. A pre Secure Act (pre 2020) death would normally use LE unless the beneficiary opted for the 5 year rule instead by the end of the year following the year of death. Otherwise, the beneficiary would take single life table RMDs using non recalculation. Your other post explains how these RMD divisors should be reset starting in 2022. Note that non spouse beneficiaries can never use recalculation for RMD divisors. They must reduce the applicable divisor by 1.0 each year.
Permalink Submitted by George McCabe on Tue, 2024-01-23 03:00
So would a pre-2020 inherited IRA for a non-spouse ever use the Uniform Life table or always the Single LIfe Expentancy table?
Permalink Submitted by Alan - IRA critic on Tue, 2024-01-23 03:17
Always the single life table. The Uniform Table only applies to IRA owners.