Inherited IRA RMD
I have a new client who has inherited an Inherited IRA from his late mother in 2019. The 2019 RMD divisor was 5.6. The 2020 RMD divisor would have been 4.6 (but was waived due to the CARES Act and not taken). Am I correct in understanding that the 2021 RMD divisor would be 3.6 (2020’s 4.6 reduced by 1), even though the 2020 RMD was not required? Thanks,
Permalink Submitted by Alan - IRA critic on Mon, 2021-11-22 21:12
Yes, 3.6 is correct. That said, if mother inherited the IRA from her husband and failed to take her full beneficiary RMD in any year thereafter, she would have defaulted to ownership of the IRA. And in that case the client would be treated as the designated beneficiary of mother rather than a successor beneficiary. As such, client would qualify for annual life expectancy RMDs based on his attained age in 2020 and would get a much longer stretch period. It is worth checking into this if there is enough access to her tax records to determine what her RMDs would have been. Perhaps her tax preparer could also be a source of info. Again, this is only possible if mother was the sole beneficiary of her husband’s IRA.