inherited IRA / RMD distribution sequence
I am trying to understand the inherited IRA RMD distribution sequence. Father passes leaves his son as beneficiary, the father is currently taking his RMD. The son was name designated beneficiary, the son can stretch the IRA over his life expectancy – because the son was named as a designated beneficiary he, the son, doesn’t have to distribute the funds in five years. I am correct in my understanding??
Permalink Submitted by Alan Spross on Fri, 2011-08-19 01:13
Yes, correct. Even if the father passed prior to his required beginning date, the son could stretch his RMDs over his own life expectancy by simply selecting that option rather than the 5 year rule.
When the IRA is left to the estate, then you have the more restrictive RMD options including the 5 year rule if IRA owner passed prior to the RBD.