Inherited IRA RMD
We have a client that inherited an IRA, the decedent passed away in 2023 but the account was not moved to the 3 beneficiaries until May 2024. How would they calculate their RMD for 2024?
We have a client that inherited an IRA, the decedent passed away in 2023 but the account was not moved to the 3 beneficiaries until May 2024. How would they calculate their RMD for 2024?
Permalink Submitted by Alan - IRA critic on Thu, 2024-11-07 15:19
If these are 10 year rule beneficiaries, the IRS has waived the 2024 beneficiary RMD, but beneficiary RMDs must start next year only if the decedent passed on or after their RBD, with the inherited IRAs having to be drained by 2033. For the 2025 beneficiary RMD (if applicable), each beneficiary would determine what their divisor would have been this year for their specific age, then that divisor will be reduced by 1.0 for 2025 and also for each year thereafter.
If the decedent did not complete their 2023 RMD before passing, the beneficiaries must complete it by the end of 2024 and can do so in any combination between them.
If the client happened to be an EDB (for a child of the decedent, the child would have to be a minor child or disabled or chronically ill to be an EDB), the 2024 beneficiary RMD is not waived and the RMD method outlined above would apply.