Inherited IRA RMD begin date for IRA that was inherited by decedent

Submitted by Frank Petranka on Thu, 2019-11-07 14:58

If a decedent inherited an IRA and leaves that IRA to a beneficiary, when must the beneficiary begin taking RMDs? Example: my dad inherits his brother’s IRA. When my dad dies he leaves it to me. Thanks.

Frank Petranka



Submitted by Alan - IRA critic on Thu, 2019-11-07 15:20

  • The rules are different if a spouse inherits, so this reply only addresses a non spouse beneficiary. In your case, you would have to continue the RMD schedule your Dad was using, ie the divisor he would have used had he lived. You would be considered a “successor beneficiary” inheriting an already inherited IRA. You are also responsible for completing Dad’s RMD for the year he passes should he pass without completing it. You also could not combine this inherited IRA with any other inherited IRA that your Dad may have owned since the RMD divisors would be different. Should you inherit the already inherited IRA, if would be wise to verify that Dad was using the correct divisors himself. You should continue his correct divisors, not the divisors he was using in the event that they were incorrect. NOTE: If Dad was using the 5 year rule instead of life expectancy table I divisors, you would have to drain the IRA within the same 5 year period Dad was using. This is probably not the case, but is possible, and would be the case if his brother passed prior to his required beginning date and left the IRA to his estate (did not name Dad on his IRA) and the executor assigned the IRA to Dad. Dad would then have had to drain the IRA by the end of the 5 th year following the year of brother’s death, and you would also in this situation.
  • As you can see, there are numerous possibilities that require knowing the background of the IRA. Determining all these details is time consuming, especially in more complex situations. If any comfort, the IRS does not actively attempt to track this either.

 

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