combining IRAs

Submitted by Thomas Snyder on Wed, 2023-07-26 13:16

I have 3 traditional IRAs and I inherited 2 traditional IRAs from my brother who died 1/22/23 at the age of 81. Can I combine my IRAs with the inherited IRAs or must I keep them separate? Also, when calculating the RMD for the inherited IRAs do I use his age from the Uniform Lifetime Table or my age, I am 75.

Thanks for your time
Tom Snyder
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Submitted by Alan - IRA critic on Wed, 2023-07-26 14:40

  • You can combine the IRAs you own but not with any inherited IRAs, although if your brother always owned the IRAs you inherited and the RMD calculation was the same, you could combine the two inherited IRAs by direct transfer. RMDs for your owned IRAs can be aggregated with each other, but not with any of the inherited IRAs. The Uniform Table applies only to IRAs you own, never to inherited IRAs.
  • If you were the only beneficiary, because you are NOT more than 10 years younger than your brother, you are an EDB (eligible designated beneficiary) and are not subject to the 10 year rule. You can stretch the inherited IRAs over your single life expectancy based on your attained age in 2024. That first divisor comes from the single life table and is applied to the 12/31/2023 balance of the inherited IRAs. However, as your brother passed early in the year he may not have completed his 2023 RMD before passing, and you are responsible for completing that RMD. If there were any other beneficiaries, please advise.

Submitted by Thomas Snyder on Wed, 2023-07-26 15:05

I am the only beneficiary.  The balance of inherited IRA’s is $23K.  My brother was 81 and I am 75. Do I use 19.4 or 24.6 as the divisor?

Submitted by Alan - IRA critic on Wed, 2023-07-26 15:24

  • The 2023 RMD is that of your brother if he did not complete it. His divisor is based on his age at the end of 2023. If that will still be 81, his divisor is 19.4 into the 12/31/2022 account value. But if he would have turned 82 by year end, the divisor is 18.5. This distribution will be issued to you and you will receive a 1099R reportable on your taxes.
  • Your beneficiary RMDs start next year. If you will reach 76 by the end of 2024, your 2024 single life table divisor is 14.1. If you will be 77 it is 13.3. Whichever divisor applies, you would then reduce by 1.0 for each successive year, so you only need to check the table one time.
  • You can always take out more than the RMD if you wish. Eventually, the balance will become small enough that you will probably just choose to withdraw the total balance.

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