Inheriting an inherited IRA
Dad passed away in 2011 and mom inherited his IRA. It was set up as an inherited IRA rather than a spousal IRA. Mom passed away at age 74 in 2017. Son inherited her inherited IRA. Does the son take RMD’s based on her factor (minus 1 per year) or based on his age (minus 1 per year)?
Permalink Submitted by Alan - IRA critic on Thu, 2019-04-11 15:29
In this situation, the son is a successor beneficiary if Mom took all her required beneficiary RMDs through 2016. Her beneficiary RMDs would start by the end of the year Dad would have reached 70.5. If she fell short on any beneficiary RMD, she is deemed to have acquired ownership of the inherited IRA. In that case, the son would be treated as a designated beneficiary and could use his own single life expectancy. The Son would also be treated as a designated beneficiary if Dad would not have reached 70.5 by the end of 2016, meaning that Mom would not have started beneficiary RMDs before her death. Investigating this oftens preserves the stretch for a non spouse beneficiary that otherwise would have been a successor beneficiary.