Determining the divisor for an inherited IRA beneficiary
Question: Can the starting point divisor be changed once it is determined for the first year of distributions.
Facts:
IRA type: traditional IRA
IRA owner’s Date of Birth: 07/11/1938
IRA Owner’s Date of Death: 06/26/2016
Beneficiary type: nonspouse
Beneficiary’s Date of Birth: 06/20/1941
Divisor for beneficiary age 76 for 1st year of distribution (2017) in Table 1 (latest version 2016): 12.7 minus 1 for each subsequent year equals 5.7 for the divisor to be used for the 2024 year. The IRA custodian is using 14.1 as the starting point divisor based on the 2023 (current) IRS table 1 for a beneficiary age 76 in 2017 less 1 for each subsequent year which comes up with 7.1 for the 2024 year divisor.
Question: Can the starting point divisor be changed if the current table has a different amount or do you have to keep using the divisor you started with (and subtracting 1 for each subsequent year)?
Permalink Submitted by Alan - IRA critic on Fri, 2024-04-26 15:23
The custodian’s divisor is correct. The divisors were to be reset to those of the new 2022 RMD table in 2022 exactly as the custodian has done. The 2022 table results in a slightly lower RMD than if the tables had not changed. Failure to reset the divisors would result in a distribution slightly higher than the actual RMD, so there would not have been any RMD shortfall.
Permalink Submitted by Doug Neal on Fri, 2024-04-26 19:41
Thank you. I just learned something new.