Bene IRA

Submitted by Mike LaRose on Thu, 2019-09-26 17:05

A gentleman (67 years old) inherited from his sister (72 years old) an IRA in 2018. HE just moved it into a Bene IRA. Is he required to take RMD out for 2018 and 2019 based on his life expectancy in 2019?

Thanks,

Mike



Submitted by Alan - IRA critic on Thu, 2019-09-26 17:46

  • If his sister did not complete her 2018 RMD before passing, he becomes responsible (along with any other beneficiaries) for completing her 2018 RMD from the inherited account. However, his sister might have completed the RMD from another IRA if she had more than one. This will take some research to determine if the person is not the executor. If the year of death 2018 RMD is not completed until this year, he will have to file Form 5329 to have the penalty waived. This waiver is routine from the IRS in this situation. His own beneficiary RMDs start this year (due by 12/31/2019) based on his age at the end of 2019 using Table I. Once he determines the 2019 RMD divisor from Table I, he does not have to look up divisors again. Each successive year he will reduce the 2019 divisor by 1.0.
  • If there were any other beneficiaries on this IRA, that raises additional isssue. Or if this IRA was inherited by his sister before she passed (she did not own it), another set of issues. If any of these situations applies, please advise.

Submitted by Mike LaRose on Thu, 2019-09-26 18:03

Thansk Alan. He was the only bene.

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