Inherited IRA

Submitted by Richard Ernst on Mon, 2022-10-24 18:42

A client of ours ( 07/12/1960 ) inherited his dads IRA in 2008 The value of the Inherited IRA on 12/31/2021 was $ 232,895.55. His 2022 divisible factor was 21.7 ( -1 each year ) and the 2022 RMD was distributed in January.

This client passed away in August. His wife ( 11/23/1956 ), was & is the named beneficiary.

Our question is: What are her options? Does she continue where our client left off ( 20.7 in 2023 ) or does she now have to deplete the account within the next 10 years?



Submitted by Alan - IRA critic on Mon, 2022-10-24 23:48

  • The divisors used in the past appear incorrect, but for 2022 the correct divisors must be reset to reflect the new 2022 RMD tables. Client age 49 in 2009 would have had an initial divisor of 37.1 in the new single life table, less 13 years to 2022 would result in a 2022 divisor of 24.1. Use of the lower divisor would have resulted in a distribution greater than the actual 2022 RMD.
  • HIs wife is the successor beneficiary and will be subject to the 10 year rule. However, whether she must continue the RMD schedule of your client depends on when client’s Dad passed in relation to his RBD. If Dad passed prior to his RBD (4/1 of the year after the year he would have reached 70.5), the annual RMDs can be discontinued after 2022 except. However, if Dad passed on or after his RBD, then client’s surviving spouse will have to continue client’s RMD schedule each year 2023-2031, reducing client’s correct 2022 divisor by 1.0 each additional year. Either way, she must have fully distributed the IRA by 12/31/2032.

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