For Spousal Inherited IRAs, if the living spouse waits to defer RMDs until the deceased spouse would have turned 72 (under the new rules), what table is used to calculate their RMDs when they do have to start taking them? The Single Life Expectancy Table, or the Uniform Lifetime Table?
I have a client who is currently taking RMDs from his IRAs. His wife is only 68 currently. When he passes what table will be used to calculate the RMDs she will need to take. For example if he passes tomorrow.
If she is the sole beneficiary, she should elect to assume ownership of the inherited IRA. Her RMDs start for the year she reaches 72 and the Uniform Table would apply. This table produces much lower RMDs than the single life table would if she maintained the account as inherited. There is no benefit to keeping the account in inherited status in this situation. Note that if he passes this year, she WILL be responsible for completing his 2021 RMD if he did not complete it. She could do that either before electing ownership or after. Note that electing ownership does not result in a 1099R and does not count as a rollover with respect to the one rollover limitation.
Permalink Submitted by Alan - IRA critic on Tue, 2021-02-02 22:54
For an inherited IRA, the surviving spouse must use Table I (Single Life)to determine RMDs although if a sole beneficiary the spouse does not reduce the divisor by 1.0 each year, they re enter the table each year and use their current age for the divisor. Once the inherited IRA RMDs must begin in the year the deceased spouse would have reached 72, the RMD will be much lower if the surviving spouse elects ownership and can switch over to the Uniform Table.