inherited, inherited ira
Client A dies and leave his Traditional IRA to his friend. She has the IRA for a few years and then she dies. Leaving her inherited IRA to her daughter. There is no RMD this year and this occurred back in 2018. So who’s age do we use to figure the inherited persons annual withdrawal going forward. The original owner? The 1st beneficiary or her beneficiary. This 3rd person is age 62 and the account has a value of 105k.
RMD is calculated on who?
a. original owner, he was 77 when he died
b the 1st beneficiary who was 72 when she inherited the account but died at age 80 in 2018
c. the newest beneficiary who is now age 62
Permalink Submitted by Alan - IRA critic on Thu, 2020-04-16 23:48
The successor beneficiary (age 62), must continue to use the RMD schedule of the designated beneficiary. Daughter should have checked to confirm the correct RMD divisor for her mother, and would have subtracted 1.0 from the mother’s 2018 divisor for her 2019 divisor. Her 2020 RMD is waived, and her 2021 divisor will be her 2019 divisor reduced by 2.0. Etc. The Secure Act does not affect this situation, but would have if mother had passed this year instead of prior to this year.