can an inherited IRA and an inherited, inherited IRA be combined?

Submitted by Amanda Minter on Mon, 2022-10-24 18:35

We have a couple. Husband passed pre 2020. The wife decided to transfer his IRA account into an inherited IRA, keeping it separate from her own.
She just passed in 2022 and there are 2 beneficiaries/daughters.

The daughters were told they could combine the 2 inherited IRA accounts (one from mom and one from dad) so each daughter would only have one inherited IRA going fwd. (Each was 50% beneficiary of mom’s own IRA as well as mom’s inherited IRA from her husband/their dad. )

1 – can the daughter(s) combine the inherited ira (mom was acct owner) with the inherited/inherited ira (dad original acct owner)? if so, we are assuming there is just one RMD required??

2 – if not, and they must keep them separate, are the daughters then required to each take an RMD from inherited account, one from mom and one from dad?



Submitted by Alan - IRA critic on Mon, 2022-10-24 21:13

  • All background data must be considered to determine the RMD rules for a certain beneficiary. Even if the IRA is inherited from the same decedent, whether the original owner or a beneficiary, the RMD rules can be different. Any inherited IRA that either must be titled differently from another (eg inherited from a different decedent) or will be subject to a different RMD divisor cannot be either aggregated for RMDs or combined into a single inherited IRA.
  • Re Q 1 – No, unless it is determined that Mom did not take her full beneficiary RMD in any year, and therefore defaulted to ownership of the IRA inherited from Dad. In that case, the daughters would be considered designated beneficiaries of Mom, and the two inherited IRAs could be combined and a single RMD taken. Otherwise, they must be kept separate along with separate inherited IRA RMDs.
  • Most likely, the daughters will be subject to the 10 year rule for both of these inherited IRAs. However, the prosposed Regs would also require annual RMDs in years 1-9 if Dad passed after his RBD for the already inherited account. Those RMDs would be a continuation of Mom’s beneficiary RMD schedule but with a 1.0 divisor reduction starting in 2023. For the IRA that Mom owned, if she passed after her RBD, the daughters would use their own individual life expectancies for RMD within the 10 year rule, if separate inherited IRA accounts are created by 12/31/2023. If the separate account deadline is missed, the age of the oldest daughter would apply for both of them.

Submitted by David Mertz on Mon, 2022-10-24 21:44

Mom would also be treated as owner rather than beneficiary of the IRA inherited from Dad if she died before December 31 of the year Dad would have reached age 72, the year for which Mom would be required to begin taking RMDs as beneficiary.

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