Inherited IRA from Spouse

Submitted by Jonathan Sard on Thu, 2017-08-10 15:18

i received this inquiry from a client and not sure how to answer. Can someone help?

After my wife’s death, her IRA became my property and I characterized it as an Inherited IRA, so as to avoid MRD until 2018, the year in which she would have been 70½. I know that since it was a Spousal IRA, I could have transferred it to an IRA in my name, either existing or newly created. If I let it stay as is, the MRD’s are based on the “Single Life Expectancy” table. If it were rolled over into my own IRA it would be subject to the “Universal Table” which requries considerably less distributions.

Question is, can I at this time (beginning of 2018) , roll it over into my own IRA and be subject to the Universal table instead of the Single Life table?

Thank you!



Submitted by Alan - IRA critic on Thu, 2017-08-10 18:10

Client can roll the inherited IRA over to their own IRA before the end of 2018 and use the Uniform Table for their 2018 RMD. Therefore, they can still reduce the RMD for 2018. In 2018 client should advise the inherited IRA custodian that they elect to assume ownership of the inherited IRA. They can then transfer or roll it over to another IRA they own and the 2018 RMD will be figured from the Uniform Table (3). There is no inherited IRA RMD due in 2017.

Submitted by Ben Meyer on Thu, 2017-08-10 19:14

For this situation is there any way to avoid taking an RMD in 2017, and then take the RMD starting in 2018 using the Uniform Life Table?

Submitted by Alan - IRA critic on Fri, 2017-08-11 00:15

  • Don’t know exactly how old the client is, but let’s assume his IRA RBD has already passed based on the way the original question was framed.  If client does nothing at all in 2018, he will default to ownership of the inherited IRA, and will have a delinquent Uniform Table RMD for 2018, which would be less than the RMD as beneficiary. 
  • On the other hand, if the client reaches 70.5 in 2018 and rolls the inherited IRA over to his own, he can delay the 2018 owned IRA RMD until 4/1/2019. But if client reached 70.5 before 2018, there is no way to avoid taking an RMD in 2018.
  • Client does not have to take any RMD for 2017 if he leaves the IRA as inherited beyond the end of 2017 since his spouse would not have reached 70.5 until 2018.
  • Benn, I edited my earlier post to reflect that there was no 2017 RMD due as long as client leaves the IRA as an inherited IRA until 2018.

Submitted by Jonathan Sard on Fri, 2017-08-11 12:09

The client is 74 years old.  Does he HAVE to do the rollover in 2017 and take the MRD this year based on value as of end if 2016? Or can he do the rollover in 2018 and start making MRD in that year? His wife died in 2013 but would not have been 70 1/2 until 2018.  Thanks! 

Submitted by David Mertz on Fri, 2017-08-11 12:53

If in 2018 (not in 2017) the client makes the election to treat the IRA as the client’s own, there will be no RMD for 2017 (because his wife would not have reached age 70½ until 2018) and the 2018 RMD will be based on the client’s age using the Uniform Lifetime table (because making the election in any year after the year of his wife’s death results in RMDs for the year of the election and for subsequent years being determined with the client as owner). CFR 1.408-8 Q&A-5:  https://www.law.cornell.edu/cfr/text/26/1.408-8

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