inherited IRA
I inherited an ira from my 66 year old sister who passed away in May of 2017. I am 74 years old. My question is when do I have to take the RMD for this inherited ira, 2017 or 2018?
Your first beneficiary RMD year is 2018, and you must distribute that RMD by 12/31/2018. It will be calculated using your age as of 12/31/2018. Get the divisor from Table I, then starting in 2019 and each year thereafter reduce the previous divisor by 1.0. Therefore, you only need to use the table next year and do not have to use it again. You cannot combine this inherited IRA with the RMDs of any IRAs you own.
What are the distribution options. Can the estate beneficiaries (3) roll the proceeds into inherited IRAs for each. If the estate beneficiaries simply want to cash in, who is responsible for income taxes and at what level?Help!
- If an IRA was left to an estate, the executor can usually assign the IRA to inherited IRA accounts for each beneficiary. But if an employer non IRA plan was inherited by an estate, there cannot be a direct rollover to inherited IRAs and a lump sum distribution will usually be paid to the estate. This answer assumes beneficiaries are non spouses.
- If this was an IRA, distributions can be paid to the estate and passed through to the beneficiaries on a K 1, and each beneficiary will then report the distribution on their personal return and pay taxes at their personal rate. However, if the executor assigns the IRA to each beneficiary’s inherited IRA before any distributions are made, then each beneficiary will request their own RMD or cash out directly from the inherited IRA custodian.
- If the plan owner’s year of death RMD was not completed, the beneficiaries are jointly responsible for completing that RMD, and it should be done by the end of the year in which owner passed. If too late, then ASAP afterwards.
- More info would be helpful – type of plan inherited, spouse or non spouse beneficiaries of the estate, whether owner passed after RMDs had started or not.
Can I aggregate the RMD from an inherited IRA with the RMD from a non-inherited IRA, and take all the distributions just from the non-inherited account? I am 63 years old.
- No, you cannot do that with a non spouse inherited IRA. If the inherited IRA was from your spouse, you could elect to assume ownership of it and then aggregate the RMD with your other owned IRAs. You could also aggregate the RMD of a non spouse inherited IRA with other inherited IRAs from the same decedent.
Permalink Submitted by R Matts on Mon, 2017-12-18 19:45
My 66 year old sister passed away in May of 2017. She had an IRA nameing me as beneficiary. I opened an IRA with this money a month later and it was opened as an Inherited IRA. I am 74 years old. My question is when do I have to take the RMD for this inherited ira, 2017 or 2018?