RMD Calculation for Non-spouse Beneficiaries

Submitted by Bob Foland on Wed, 2017-05-03 16:15

My client died in December having named his four children as co-equal beneficiaries to his SEP and Roth IRAs. I don’t know how to calculate their RMDs other than applying the appropriate divisor for each beneficiary to 25% of the 12/31/16 IRA value. Is that correct?



Submitted by Alan - IRA critic on Wed, 2017-05-03 18:47

  • If the client passed after his required beginning date and did not complete his RMD for the year of death, the beneficiaries must complete the year of death RMD. They can divide that up in any porportion they wish.
  • Beneficiary RMDs are based on 25% of the 12/31/2016 IRA value. If the beneficiaries create separate inherited IRA accounts before 12/31/2017 they can each use their own life expectancy for RMDs. If they do not create separate accounts by that deadline, they must use the age of the oldest beneficiary on 12/31/2017.
  • RMDs must be taken separately from the inherited Roth and inherited SEP. If client first contributed to a Roth IRA before 2013, all Roth distributions will be tax free and do not have to be reported on Form 8606.

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