Spouse Inherited IRA RMD question

Submitted by Amanda Minter on Wed, 2024-01-31 00:22

Widow is currently 79 and taking own RMDs. Her husband passed away at age 71 in December of 2023 before his RBD. She plans to roll his IRA assets into hers this year. I want to clarify when his balances need to be included with hers for RMD purposes. If the spousal rollover is done in 2024 as planned (so she transfers his IRA assets into hers and assumes ownership), does that mean she should look at the 2023 year end value of his accounts for RMD calculations OR will it just be included for her 2025 RMDs? Can someone please clarify?
Thank you!



Submitted by Alan - IRA critic on Wed, 2024-01-31 02:20

  • If she assumes ownership of the inherited IRA any time this year, she is treated as owning the IRA for the entire year and her 2024 RMD for the formerly inherited IRA will be based on the 12/31/2023 value of the inherited IRA.
  • Assumption of ownership results in an RMD for 2024 due to her age. However, if she instead maintained the IRA as inherited, there would be no beneficiary RMD due until the year husband would have reached 73 (2025), so a 2024 beneficiary RMD would be avoided on the inherited IRA funds.
  • A confusing deadline has been placed on assumption of ownership under the Secure Act. That deadline is the later of the end of the year following the year of death (2024) or the year the surviving spouse reaches RMD age (several years ago). Therefore, her deadline to assume ownership is 12/31/2024. Beyond that date she cannot assume ownership but can do the spousal rollover by taking a distribution and rolling over the excess of the beneficiary RMD to her own IRA. But the beneficiary RMD for 2025 will be higher than her own RMD using the Uniform Table. As a result, keeping the IRA inherited until 2025 will eliminate a 2024 RMD as beneficiary, but will increase the 2025 RMD as she will not be able to use the Uniform Table if she is forced into a 2025 inherited IRA distribution due to the deadline passing for assumption.
  • This is ridiculously confusing and has received little attention from the financial press. On top of this, the Secure Act Regs are not final, only proposed, and when they are finalized it is not clear when the proposed Regs will actually become effective. 
  • To conclude, even though assumption this year will create an owned IRA RMD for 2024, it is simpler and avoids the above confusion, assumption deadline, etc.


Submitted by David Mertz on Wed, 2024-01-31 13:37

If she will reach age 80 in 2024, assuming ownership in 2024 will result in the 2024 and 2025 RMDs from this IRA as owner totaling roughly 9.85% of the IRA.  Rolling over in 2025 instead would result in a beneficiary RMD for 2025 being roughly 9.52% of the IRA, only slightly less, so there is little incentive not to assume ownership in 2024.  Delaying distributions is often not the best strategy anyway.  Spreading the distributions over more years could result in a reduction in total taxes on the IRA.



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