Beneficiary IRA Rmd’s Correction
Had mistakenly thought that for a non-spouse beneficiary you use the Single Life Expectancy Table the same way you use the Uniform Lifetime Table.
We are now trying to calculate what the RMD’s should have been. One of client’s CPA’s said that the method of calculating these changed a couple of years ago, but she has not gotten back to on the details.Was there a change?
Two of the deceased were already taking RMD’s when they died, and two had not needed to start taking any when they died.
If not, please let me know if you think the following is the right way to calculate these.
Use the factor for the age of the beneficiary from the Single Life Expectancy Table for the first year that the distribution would apply to them and the account balance as 12/31 of the prior year.
Then reduce the factor by one for each subsequent year.
This makes a big difference for one of the clients that was 89 when her daughter died.
Appreciate your help!
Jan Sleeter
Permalink Submitted by Alan - IRA critic on Wed, 2015-04-29 19:17
Yes, the method you stated is correct in most situations. However, the decedent’s age should be used if the IRA owner passed after the required beginning date and beneficiary was older, but the daughter would have to be only 18 or less years younger than her mother for her to have passed after her RBD. The key is whether the IRA owners passed prior to or after their RBDs, and if so whether the beneficiary was older or not. Obviously, most beneficiaries are younger. The last change to RMD rules was in 2002, 13 years ago.