Bene IRA RMD for Minor

Submitted by MIKE KRUCHTEN on Wed, 2018-01-10 16:14

I had a client pass late in 2017, his minor son was primary beneficiary to his TIRA and Roth IRA. Bene IRA account now opened with funds. My question is what factor is used for the minor, he will be 9 years of age in 2018. The IRS table 1 I find all start at age 21, I assume all minors under age 21 who inherit an IRA start at factor of 62.1 and reduce by 1 every year after?

Also, I realize the RMD from Bene TIRA could be prone to kiddie tax but since Bene Roth IRA RMD is tax free, I assume no kiddie tax on Roth IRA RMD.



Submitted by Alan - IRA critic on Wed, 2018-01-10 16:27

  • Table I in Pub 590 B starts at age 0. The divisor for age 9 is 73.8. 
  • State law will determine who the RMD is paid to. Often it must go to an UTMA account for the minor.
  • You are correct about the kiddie tax, and the TCJA changed the kiddie tax rates starting in 2018. The inherited Roth IRA will not trigger such a tax unless in the rare case where the client’s first Roth contribution was not more than 5 years from the year of the first RMD, and the beneficiary distribution was so large that it reached the earnings amount in the Roth. If the minor just takes RMDs they will not get close to earnings before the 5 years is reached. But the year of client’s first Roth contribution must be determined to know if the minor can avoid filing Form 8606 to report distributions.

Add new comment

Log in or register to post comments