IRA owned by a trust, need RMD
I have a client who inherited his father’s IRA, but his father’s IRA was owned by a trust. Whose age do I use for the 2008 RMD calcuation?
Jamie
I have a client who inherited his father’s IRA, but his father’s IRA was owned by a trust. Whose age do I use for the 2008 RMD calcuation?
Jamie
Permalink Submitted by Alan Spross on Thu, 2008-12-04 20:17
Jamie,
An IRA cannot be owned by a trust. What you have here is a trust named as the beneficiary of the father’s IRA.
The RMD paid to the trust is based on:
1) Whether the trust is qualified for look through treatment
2) If not qualified, whether the father passed before or after his required beginning date (roughly age 71).
3) If qualified, the age of the oldest beneficiary, and for certain trusts that retain income, the ages of remainder beneficiaries.
Therefore, additional information is needed to determine the age used. IF the trust is qualified for look through treatment and passes through the RMDs to the client, who is the only beneficiary of the trust, the client’s age in the year following his father’s death is used along with the single life table.
See the basics for qualified trusts in Pub 590, p 39.