IRA BDA Pre and Post Secure Act question
Hello,
I have a client who has an IRA BDA (non-spouse) that they inherited in 2010 and have been taking RMD’s based on their life expectancy in 2010 (29.8) less one every year after. This client passed in 2024 and has 2 beneficiaries. Would the options for the 2 beneficiaries be the following:
Take any remaining RMD for 2024 for the first IRA BDA owner and then the 2 benefactrices would follow the post secure act 10 year rule with 2025 being year one?
Any help would be greatly appreciated ? Thank you.
Permalink Submitted by Alan - IRA critic on Thu, 2024-01-18 18:03
The year of death RMD for the first beneficiary can be completed in any combination by the two successor beneficiaries. You are correct that the 10 year rule will apply to the successor beneficiaries and 2025 is year 1. However, whether the original owner that passed in 2010 passed prior to RBD or after will have to be determined. If the original owner passed prior to their RBD, the annual RMDs in years 1-9 will not apply, but if that owner passed post RBD, the successor beneficiaries will have to continue the RMD schedule of the client. Finally, the client should have “reset” their divisors in 2022 to reflect the new 2022 tables, and the new tables would produce a slight reduction for 2022 and subsequent RMDs if the subsequent RMDs are required.