Conflicting Advice Regarding RMDs for Inherited IRA

This is actually a continuation of a discussion that Alan and I had back in August 2018. For context, here is that conversation:

Submitted by warren.denardo@… on Wed, 2018-08-08 11:27

Son 77 dies while working in May 2018 , has 1mm Pension @ SURS. Has NOT drawn on it. Mother is Beneficiary, age 96.
Rollover to Beneficial IRA performed. RMDS need to be calculated and distributed. SURS claims they cannot give a value of the account on 12/31/2017. How does one determine the RMDs?
Thank you.

Permalink Submitted by Alan-iracritic@… on Wed, 2018-08-08 14:31

Son passed prior to his required beginning date, so there is no RMD required for 2018. It is not clear whether that is the reason the plan cannot provide the value at any year end, perhaps they stated this because there is no RMD due that is determined by that value. If son had retired earlier and his death had occurred after the RBD, then mother’s RMDs could have been based on son’s remaining life expectancy. But since he passed prior to his RBD, mother’s own age must be used and her RMDs will be very large. Her first RMD will be for 2019, based on 12/31/2018 value, and due by 12/31/2019. Perhaps she should take a voluntary distribution this year just to even out her taxable income over an additional year, or perhaps a disclaimer should be considered.

That ends the previous thread.

My new question comes because we are receiving conflicting information about how to calculate this RMD. We are being told that, because the assets were moved to an IRA following the death of the Son, the assets would be subject to the RMD rules for an IRA and, as a result, we would use the Single Life Expectancy of the Son to calculate the RMD. Is this advice accurate?

When a person dies beyond age 70.5 while participating in a plan under the “still working exception” does that mean that they died “on or after the required beginning date”?

If the answer is “NO” and we are to use the mother’s Single Life Expectancy, would we be able to invoke the 5 year rule? As I ask ,her current factor would be 3.4, so I believe the 5 year rule would result in an additional year in which to take the funds and spread the tax consequences.

Thank you for your additional support.



  • The son passed prior to the RBD, and in this situation the RMD for the beneficiary is determined by the plan provisions including possible elections made by the beneficiary prior to the direct rollover to an inherited IRA. In order for the 5 year rule to apply either the plan provisions would have had to require the 5 year rule, or provide the chance to make an election of the 5 year rule. See IRS Reg. 1.401(a)(9)-3, QA 4. 
  • This is a rare situation due to the age of the beneficiary, but in almost all cases the beneficiary wishes to avoid the 5 year rule. In this case the 5 year rule would be beneficial, but once life expectancy applies due to the plan provisions or beneficiary election (if permitted), the beneficiary cannot change back to the 5 year rule for the inherited IRA.  Also, see Notice 2007-7, QA 17.


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