Multiple Inherited IRA BDA Pre-Secure Act question
Hello , I have a scenario where IRA owner passed in 2001 and the spouse inherited it and then passed in 2002. Their child was the second person who inherited the IRA BDA and they passed in 2023. Can you confirm if this is how the RMD calculation would work?
1st owner father in law James Doe DOB August 6th, 1926 and DOD July 4th, 2001
2nd owner mother in law Therese Doe DOB May 19th, 1930 and DOD July 12th, 2002 – Theresa would have started to take RMD’s in 2002 at age 72 (17.2) minus one every year after.
3rd owner her husband Michael Doe DOD July 5th 2023- Michael would have needed to follow the life expectancy payments based on Theresa’s life expectancy.
Kathleen’s IRA BDA would be under the 10 year rule which would have started the year after Michael passed and an RMD would be due each year passed on Theresa’s Life expectancy which would be close to 0.00.
Any help would be greatly appreciated. Thank you.
Permalink Submitted by Alan - IRA critic on Fri, 2025-01-10 12:05
If MIL did not assume ownership of the inherited IRA before passing in 2002, you are correct that her LE RMDs would have to be continued, and this applies to all successor beneficiaries.
The prior RMD table would have applied in 2002, and the initial single life table divisor was 15.5 for age 72. That divisor is then reduced by 1.0 for each year thereafter and the inherited IRA should have been drained by Michael in 2017.
Kathleen is not responsible for making up RMD failures for Michael other than for his year of death RMD in 2023 which would have been the total balance. She had until the end of 2024 to do that, so she will now have to drain the account and file a 5329 for year 2024 only to request a waiver of the penalty.