When does RMD start on a Inherited spousal IRA
Our client passed away this year at age 65. His wife was listed as the primary beneficiay on his IRA. Because of her age, 52, we transferred the assets into an inherited IRA for her benefit. When does she have to take RMD?
Permalink Submitted by Alan Spross on Mon, 2008-03-10 18:11
Not until the year her spouse would have reached 70.5. She will be 57 then, and must take an RMD. There will be tax but no penalty since the 1099R will be coded as a death benefit. Upon reaching 59.5, she can then assume ownership of the account, stop the RMDs until she reaches 70.5, but still be able to take penalty free distributions if needed.
It was wise to set this up as inherited.
Of course, once she becomes sure she will NOT need distributions, she can assume ownership and stop the RMDs, if she does not need the RMD income. That would extend tax deferral at the risk of penalty if it turned out she was wrong and did need a distribution prior to 59.5. In the calendar year that she elects to assume ownership (re titles), the RMD for that year is determined as if she was the owner from the beginning of the year.
Obviously, she should name a successor beneficiary ASAP.