Inherited RMD IRAs calulation

client passes away in 2021, already taking RMDs from his account.

three children inherit IRAs from the client. is each of the beneficiaries required to take out RMDs from their accounts or can one beneficiary take out the total RMD amount from just her account – allowing the other beneficiaries not have any distributions and keep total funds invested.

is the RMD based on the total beneficiary account values or is the RMD based off of the value of each individual beneficiary’s inherited IRA?



  • Only the year of death RMD not completed by the parent can be taken in any combination between the beneficiaries, and that does not apply in this situation. 2022 begins beneficiary distributions, and each child should create a separate inherited IRA no later than the end of this year. Except for a disabled or chronically ill child, the 10 year rule will apply and there are no annual RMDs if client passed prior to their RBD. However, if the client passed after their RBD, the IRS has proposed that annual beneficiary RMDs be required. This proposal is not yet final, so it is not clear at this point whether the children will need to take annual RMDs or not starting this year. That said, if these RMDs are not required, they face a large distribution in year 10 which could spike their taxes in that year. Accordingly, some beneficiaries would prefer to level the annual tax impact, taking out about the same amount each year.
  • The 2022 RMD, if required per above, is based on each beneficiaries 12/31/2021 account value, but of their separate account was not yet established by 12/31/2021, it would be based on that beneficiary’s share of the 12/31/2021 inherited IRA value. 


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