Inherited IRA RMD questions
Dear Alan et al,
Our client “Jim” died in Oct 2015 with a $400K IRA. His 2015 RMD has been taken. We may not be able to split his IRA into 4 inherited IRAs until Jan 2016 so we have two questions:
1. If we split the IRA into 4 inherited IRAs in Jan 2016, it’s our understanding that each beneficiary could take the 2016 RMD based on his/her life expectancy and 1/4 of the 2015 year-end balance (~$100K each).
2. It’s our understanding that Jim’s life expectancy would not be used for the 2016 RMD. Are we correct?
Thank you,
Chris
Permalink Submitted by Alan - IRA critic on Wed, 2015-12-23 00:11
Yes Chris, that is correct. The one exception would be if any beneficiary was older than Jim and then Jim’s remaining LE would apply for that beneficiary and reduce the RMDs for that beneficiary. For the sitiuation here, there is no rush to create the separate inherited accounts by the end of this year. The deadline to do that is 12/31/2016.