Inherited, RMD and 10 year
My client, 87, died in January 2024 and had not completed his 2024 RMD prior to death.
Two daughters as equal beneficiaries.
They plan to directly roll over their share of funds to an inherited IRA.
As responsible heirs, do they also have to complete their father’s 2024 RMD?
Do they have to begin a 10-year withdrawal program this year, even if they complete their father’s 2024 RMD?
What is the beneficiary’s withdrawal rate, 10% of the account, or RMD based upon the beneficiary’s age?
Thank you!
Permalink Submitted by Alan - IRA critic on Mon, 2024-07-01 14:14
Yes, they must complete father’s 2024 RMD and can do this in any combination from the two of them, so if one prefers to take more than half of father’s 2024 RMD, the other beneficiary can reduce their portion.
Their 10 year rule ends on 12/31/2034, with the first of those years being 2025. They must also take annual beneficiary RMDs starting in 2025 based on their individual single life expectancy divisor for their attained age in 2025, then reduce that divisor by 1.0 for each year after 2025. Depending on their ages these RMDs will probably still result in a larger distribution in 2034 than the annual RMDs.