Bene IRA RMD Calculation Method
Trad IRA owner passed at age 75 in 2023.
2 children ages 45 and 35 were equal beneficiaries. Neither would qualify as a EBD.
Articles I’m reading seem to contradict RMD calculation of the 2 beneficiaries over next 10 years.
Excerpt below
The ALAR rule requires IRA beneficiaries to continue taking distributions at least as rapidly as the method being used by the original IRA owner. This means that that if the original owner hit their required beginning date at 72 and began required minimum distributions, then the beneficiaries must also continue to take out income under the same method (i.e. ‘stretch’ over their lifetime just like the original owner).
I was under the impression each bene would use their DOB to determine RMD amount over next 10 years and not DOB of the deceased IRA owner.
Permalink Submitted by David Mertz on Sat, 2023-06-17 13:02
You are correct, the calculation uses the beneficiaries’ ages (or, if the IRA is not split by December 31, 2024, the age of the oldest beneficiary). Where the excerpt says “at least as rapidly” and “under the same method,” it means annual distributions are required but does not mean that the decedent’s DOB is necessarily used. The decedent’s DOB would only be used if the decedent was younger than the beneficiary (which would make the beneficiary an EDB). Still, larger annual distributions, ones larger than would result even from using this decedent’s DOB in the calculation, might make sense to avoid a distribution of a large amount in year 10.