Distribution from “double” inherited IRA

Submitted by Adam Rosendahl on Wed, 2017-11-08 16:54

I have a client who has two IRA accounts. First, she has a traditional IRA that used to be her TSP. Second is the double inherited IRA. Her husband’s brother passed to her husband in 2013. Husband passed away and left it to my client in 2014. Do I understand correctly that she should have taken her husband’s RMD for 2014 and subsequent RMDs for 15 and 16 (17, too)? I am confused because it was first passed as non-spouse beneficiary and then later passed as spouse beneficiary.

Client is not of distribution age BUT she has been taking income from her traditional IRA. Can those elective distributions from her traditional IRA be counted to offset the otherwise (I assume) necessary RMD from the inherited account?



Submitted by Alan - IRA critic on Wed, 2017-11-08 20:15

  • Client must take RMDs from the inherited IRA. Distributions from her own IRA will not count toward the RMD for the inherited IRA. For the inherited IRA, as the successor beneficiary she must continue the RMD schedule used by her husband, with her divisors being what her husband would have used if he was still living.
  • Yes, if her husband did not take out his full beneficiary RMD for 2014, client became responsible for taking that distribution. If she did not, she should take it now, and file a 5329 for 2014-2016 requesting waiver of the 50% penalty. The IRS will very likely approve the penalty waiver.

Submitted by Adam Rosendahl on Thu, 2017-11-09 13:50

Does anyone also know which table we will use to calculate the RMDs that were missed? None of the decedents were of distribution age, neither is she. 

Submitted by Alan - IRA critic on Thu, 2017-11-09 21:26

Table I, the single life table. It is a good idea for a successor beneficiary to recheck the divisors used by the designated beneficiary rather than just reducing them by 1.0 each year. The designated beneficiary may have been using the wrong divisor. In this case, the age husband would have reached at the end of 2014 determines the divisor for the 2014 RMD. The divisor for 2015 is 1.0 less, anothe 1.0 less for 2016 etc. The table therefore is only used one time, for the initial beneficiary year only.

Add new comment

Log in or register to post comments