IRA Bene older than the IRA Owner – RMD Rule

Submitted by Wendy Mommaerts on Tue, 2023-08-22 14:28

we have a client who inherited her sisters pension.
IRA Owners birthdate: 2/19/1978 (died at the age of 44)
IRA beneficiary birthdate: 7/1/1967

The IRA beneficiary is older than her sister by 11 years. Will our client be required to take RMDs for years 1-9 and empty the IRA by the end of the 10th year?



Submitted by Alan - IRA critic on Tue, 2023-08-22 14:59

Client is an EDB and can stretch the inherited IRA over her single life expectancy. The 10 year rule does not apply unless client opts out of EDB treatment and into the 10 year rule, in which case there would be no annual RMDs in years 1-9. Client should likely remain an EDB since the inherited IRA will last much longer than 10 years.

Submitted by Wendy Mommaerts on Tue, 2023-08-22 15:30

Is the client an EDB because the IRA owner died prior to RMD age?

Submitted by Alan - IRA critic on Tue, 2023-08-22 15:47

No, client is an EDB because they are “not more than 10 years younger” than decedent. Being older is always included in this definition. Death prior to RBD is required for the option to opt out of EDB treatment in a unique situation where this would be beneficial. 

Add new comment

Log in or register to post comments