RMD for Bene IRA
I have a client that passed away in 2018 before his required beginning date. He left his IRA to his parents who have now passed and left the IRA to their beneficiaries. Whose age is used to calculate the RMD’s?
I have a client that passed away in 2018 before his required beginning date. He left his IRA to his parents who have now passed and left the IRA to their beneficiaries. Whose age is used to calculate the RMD’s?
Permalink Submitted by Alan - IRA critic on Mon, 2019-12-02 23:59
In this situation, the answer depends on what the parents did with the inherited IRA. Did they create separate inherited IRA accounts for each or pass without making any changes? Did the current successor beneficiaries inherit an IRA from each parent? I assume that there have been no disclaimers filed and that all beneficiaries were named on the IRA, estates were never the actual beneficiary, and neither parent elected the 5 year rule..
Permalink Submitted by Rick Tenison on Wed, 2019-12-04 17:36
Each parent opened their own Bene IRA. They each designated beneficiaries. They did not make any changes to the IRA’s. The new beneficiaries are the original owners Aunt, Uncle and cousin. No disclaimers, or estate named and no 5 year rule election…
Permalink Submitted by Alan - IRA critic on Wed, 2019-12-04 20:14
Each of the new beneficiaries will request that their share be transferred into their own inherited IRA, so each beneficiary will have one inherited IRA from each parent of the original owner. If the parents were different ages, the RMD divisor will not be the same on these inherited IRAs because the current successor beneficiaries must continue the RMD schedule that each parent of the original owner would have used. The divisor for 2019 would be based on the age that parent would have attained this year, and this divisor would then be reduced by 1.0 for each year thereafter. These new successor beneficiaries do not have to take their own 2019 beneficiary RMD IF the respective parent took their own beneficiary RMD before passing.