Inherited IRA

Posts Tagged ‘recalculation’

Options For A Non-Spouse IRA Beneficiary (When The IRA Owner Dies After The Required Beginning Date)

If the non-spouse IRA Beneficiary is:

One Individual:

• Distribute based on the single Life Expectancy of the non-spouse IRA Beneficiary, using the non-recalculation (term-certain) method.

The distributions must begin by December 31st following the year of death of the IRA owner.

The Life Expectancy factor for the first post-death RMD is based on the non-spouse IRA Beneficiary’s age as of his or her birthday in the year after the year of the IRA owner’s death.

Multiple individuals (assuming the IRA account has not been divided into separate accounts):

• Distribute based on the single Life Expectancy of the oldest designated beneficiary, using the non-recalculation (term-certain) method.

The Life Expectancy factor starts with the oldest designated beneficiary’s age in the year after the year of the IRA owner’s death.

Distributions must begin by the end of the year following the year of death of the IRA owner.

This rule applies even if one of the IRA beneficiaries listed is the IRA owner’s spouse.

A Non-Living Entity Or Multiple Beneficiaries Containing At Least One Non-Living Entity (assuming the IRA account has not been divided into separate accounts):

• Distribute: based on the deceased IRA owner’s remaining single Life Expectancy, non-recalculating (term-certain), based on the IRA owner’s age on his or her birthday in the year of death. This rule applies even if one of the beneficiaries listed is the IRA owner’s spouse.

Remember, by dividing the IRA into separate accounts for each beneficiary, the RMD for each separate account is based upon the Life Expectancy of that IRA ’s beneficiary. If one separate IRA is for a surviving spouse, the special spouse elections will apply to that individual account.