RMD for Beneficiary of Inherited IRA
A client was the beneficiary of his parent’s IRA back in 2015 so he set up an Inherited IRA back in 2015. The client was 55 and was taking out RMDs based on his remaining life expectancy. The client passed away last year in 2021 and his wife was the beneficiary of his Inherited IRA. Are her RMDs subject to the 10 year rule, or does she have to maintain her deceased husband’s RMD schedule based on his remaining life expectancy.
Thank you!
Permalink Submitted by Alan - IRA critic on Thu, 2022-06-09 19:56
Per the pending IRS Secure Act Regs, the successor beneficiary must determine whether the original owner passed prior to RBD or after. Given that the RBD was based on age 70.5 in 2015 and client’s age, it appears that the original owner (parent) passed after their RBD. That will require the successor beneficiary to take annual RMDs within the new 10 year rule that will apply. In 2021 the wife of client must take out client’s 2021 RMD if client had not completed it. Then starting in 2022, the wife must take annual RMDs based on her life expectancy and her age in 2022, and must also drain the inherited IRA by 12/31/2031. She does not continue deceased husband’s RMD schedule.