Inherited IRA
Greetings,
I have a client that was one of two named beneficiaries (brother….20 years older) on an IRA owned by his father. His dad was 90 yo and hopefully was taking the appropriate RMDs. My client is age 45. After we properly title his new account as an Inherited IRA, I need to calculate his going forward RMDs. Will this be based on dad’s, oldest named beneficiary or my client’s schedule?
Thanks.
Permalink Submitted by Alan Spross on Tue, 2012-10-09 16:41
If the client’s inherited IRA is created prior to 12/31 of the year following his father’s death, then the client’s own life expectancy can be used for RMDs starting in the year after father’s death.
If that deadline is missed, then the oldest named beneficiary of the IRA (older brother) life expectancy must be used for all remaining RMDs. An inherited IRA can be established for the client anytime, but it must be done prior to this deadline if he is to allowed to use his own life expectancy.
If father’s year of death RMD was not completed, then the beneficiaries (in any combination) should complete that RMD by the end of the year he died. Those distributions are reported to the beneficiaries, not the estate.