RMD valuation for inherited IRA
What dollar figure is used for RMD amount for an inherited IRA? An insurnace carrier told me the 31 Dec valuation of the deceased owner. I thought it was the inherited value.
Example: Sixty one year old client died in June 2009. Fourty three year old niece inherits $200,000 IRA in July 2009 and wants to wait until July 2010 to start RMD checks coming. 31 Dec 2008 IRA value was $190,000. Assume the value of 31 Dec 2009 of FBO IRA is $210,000. Which of the three figures is used?
Is this questioned answered somewhere in the IRS code or regulations?
Permalink Submitted by Al Fry on Wed, 2009-07-08 18:35
The valuation is on Dec 31. So an RMD must come out in year of death (YOD) based on owner’s age and value as of 12-31 in YPD (except in 2009, which is waived). Then non-spouse bene’s RMD must start in YFD, based on bene’s age as of 12-31 in YFD and value as of 12-31 YOD.
Permalink Submitted by Anonymous (not verified) on Wed, 2009-07-08 20:12
In this situation, there is never an RMD due in the year of death, regardless of the 2009 waiver. This is a pre-RBD situation, where the niece has the choice of:
*Life Expectancy Rule: begin RMDs in 2010: Dec. 31, 2009 balance/Her factor in 2010 (non-recalculated for later years)
or
*5-year rule.
pmk
Permalink Submitted by Al Fry on Wed, 2009-07-08 20:21
Sorry i missed the age in the example.