IRA Required Minimum Distribution From an inherited IRA
Case Study
IRA Required Minimum Distribution From an inherited IRA
Scenario
Non-Spousal inherited IRA where the decedent is younger than the beneficiary and the decedent had already been taken RMD.
Going forward,
How is the RMD Calculated?
1) Proceeding on the scheduled RMD of the decedent, minus one each year or
2) Based on the life expectancy of the beneficiary, then minus one each year.
Permalink Submitted by Alan Spross on Fri, 2010-07-09 22:37
1) would be the closest, but Table I applies instead of the Uniform Table that the decedent used. The RMD is based on the decedent’s remaining life expectancy because it is longer than using the beneficiary’s life expectancy since the decedent was younger.
Note that from a technical standpoint, the decedent could have taken an RMD, but could still have passed prior to the required beginning date. The first RMD can be taken as much as 15 months prior to the RBD. If that was the case, the decedent’s life expectancy could NOT be used by the beneficiary. But I assume that your case study contemplated the IRA owner’s death to have occurred on or after the required beginning date.
For the year of death, the RMD would be that required of the IRA owner as if they lived all year. The above paragraphs apply to years following the year of death.