inherited ira rmd

Submitted by nick sklenar on Fri, 2013-10-11 17:58

Client was already receiving RMD at time of death. Non-spouse beneficiaries opted to continue the RMD’s. What is the correct formula to use to calculate the RMD’s each year. Which table do we use? Thanks.



Submitted by mk foss on Fri, 2013-10-11 18:07

It isn’t clear if the deceased client was receiving RMDs from an inherited IRA or was receiving them from his/her own IRA.

  1. If we’re talking about the IRA owner’s own account, the beneficiary starts distributions in the year after the death based on that person’s age in the year after death and the 12/31 balance of the account for the death year. The decedent’s RMD for the year of death must be taken first if it hasn’t been done, then the balance can be transferred to an inherited IRA account. The factor from the single life table is reduced by one for each subsequent year’s RMD.
  2. If the decedent was the beneficiary of someone else’s IRA, the new beneficiary uses the same schedule as the decedent reducing the divisor by one each year. The RMD for the year of death must be taken first though.

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