Inherited IRA (Spouse beneficiary)
T-IRA owner, age 73, died 3/24/20
Surviving spouse, sole beneficiary – inherited the IRA – took RMD’s in 2021 & 2022 and also died in 2022
3 (healthy, adult) children are beneficiaries. I believe the 3 children as non-Eligible Designated Beneficiaries are subject to the 10 year rule.
Do they need to take RMDs in years 1-9 (of the 10 year payout) starting in 2023? I think they are subject to RMDs because the original account owner died after his/her RBD for RMDs using the LE of each beneficiary.
All help is appreciated
Thank you
Permalink Submitted by Alan - IRA critic on Tue, 2022-12-27 21:52
Correct, they are subject to annual RMDs from 2023- 2031 with a full distribution in 2032. As successor beneficiaries to surviving spouse their annual LE RMDs continue the RMD schedule of the SS spouse, but with a 1.0 divisor reduction each year starting in 2023. However, if SS failed to take the full beneficiary RMD in 2021 and defaulted to ownership of the IRA, the children’s annual RMDs would instead be based on their respective ages if they created separate inherited IRA accounts by 12/31/2023, but the inherited IRAs must still be drained by 12/31/2032.