We have a client that inherited two IRA accounts that were her late mother's.
• Approximate values: $300,000 and $30,000
• Her mom was under the age of 70 ½ when she died in 2014.
• Client took RMD’s in 2015, 2016 & 2017 from the $300,000 account only, based on the $300,000 market value.
• The $30,000 account was untouched.
• Realize now that we took out too little using the life expectancy method for all accounts in aggregate.
• I understand there is also 5 year method for distribution.
o Can we treat one account (the $30,000) using the 5-year and the other account using the life expectancy method and completely withdraw the $30,000 account within the 5 year window?
o If not, should the client immediately take RMD’s in the correct amounts for 2015, 2016, and 2017 for the $30,000 account and file a 5239 for relief from penalties?
o Do I also need to file an amended return for 2015, 2016 and 2017?