RMD Inheritance
There is a married couple. The wife Sarah, passes away. Her IRA is inherited by her husband Sam. Sam takes out 1 distribution based on his life expectancy then dies. The IRA is now inherited by their daughter. She needs to take out a yearly RMD. Should the RMD based on her father Sam’s life expectancy or her own?
Permalink Submitted by Alan Spross on Wed, 2011-12-07 21:07
If Sam assumed ownership of the IRA, then the daughter can use her own life expectancy. But if he was treating the IRA as inherited, then the daughter must use Sams extended RMD method and what his divisors would have been.
There is one other possibility. If Sam passed before the year his wife would have reached 70.5 while treating the IRA as inherited, then the daughter will be able to use her own life expectancy.