RMD for second tier beneficiary
Account owner with dob of 2/21/1920 dies in 2011, with spouse as beneficiary. Spouse does NOT roll into her own name. Spouse with dob of 3/3/1921 dies in 2014 named her adult daughter as beneficiary.
Fast forward to 2016. I say one calculates the RMD in 2016 naming original owner as owner, and the spouse as beneficiary, with “yes” to the “is beneficiary the spouse” even though she is deceased and the adult daughter is the second tier beneficiary.
Four different softwares come up with the same RMD result, but the custodian is claiming they are not accurate.
Account value 12/31/2015 $11,497.72
Can someone run this for me and tell me what they come up with as the adult daughter’s RMD for 2016?
Permalink Submitted by Alan - IRA critic on Tue, 2016-03-08 23:15
I get 4,422.20 figured manually. Of course, this assumes that the surviving spouse completed her beneficiary RMDs in full for 2012 and 2013. This should always be checked because if she fell one cent short then she becomes the owner by default, which would make the daughter her designated beneficiary.
Permalink Submitted by [email protected] on Wed, 2016-03-09 16:11
is that because spouse gets to recalculate as bene whle others don’t?-m
Permalink Submitted by Alan - IRA critic on Wed, 2016-03-09 17:08
m- Yes. The 1.0 reduction does not apply for 2013 and 2014, but it does for 2015 and 2016. Therefore, the successor beneficiary RMD divisor cannot be determined by using the original designated beneficiary divisor and reducing by 1.0 for every year since like you could if the designated beneficiary was a non spouse.
Permalink Submitted by Ben Meyer on Wed, 2016-03-09 22:58
Permalink Submitted by Alan - IRA critic on Wed, 2016-03-09 23:02
Yes, correct.