Aggregation Rules
(Reference: June 2015 IRA focus newsletter- (RMD Planning- Aggregation rules)
I’m particularly interested in the scenario illustrated on page three regarding Brock. My interpretation is that Brock is a non-spouse beneficiary and that because the inherited IRAs are from the same person he is permitted to consolidate the RMDs from all accounts and take the distribution from one. Please confirm whether this is correct. Your assistance regarding this matter is greatly appreciated.
Thanks!
Permalink Submitted by William Tuttle on Mon, 2016-09-19 14:58
Only if all of the inherited IRAs have the same divisor, which will be true if they were the decedents IRAs. If any of them are inherited inherited IRAs with different divisors, they can not be agregated.
Permalink Submitted by George Fossing on Mon, 2016-09-26 14:42
Thanks! Big help!
Permalink Submitted by Alan - IRA critic on Mon, 2016-09-26 19:09
Note that aggregation of RMDs and combining accounts are two different issues. For example, if son A inherits an IRA directly from his father, and also inherits another IRA along with older son B from his father. However, for the second IRA separate accounts were not established by the deadline, so son B’s life expectancy will determine the RMD divisor from the second IRA. Son A still inherited the IRAs from the same decedent and can aggregate the RMDs derived from different divisors, but cannot combine the inherited IRAs into the same account because a given account can only have one divisor. Most likely, the IRS would require son B’s divisor to be used on any combined inherited IRA. In summary, aggregated RMD accounts cannot always be combined into the same account.