A:

The five-year rule applies only when the IRA owner dies before the required beginning date (RBD). If the IRA owner dies after the RBD and did not satisfy the required minimum distribution (RMD) for the year of death, the beneficiary must satisfy the RMD on behalf of the deceased. The amount must be calculated as though the IRA owner were still alive; this means the amount must be calculated using the uniform life table. The amount must be reported in the name of the deceased and the beneficiary and the tax identification number of the beneficiary.

All subsequent distributions should be calculated on a non-recalculated basis over the life expectancy of the beneficiary or the remaining life expectancy of the deceased, whichever is longer.

This question was answered by Denise Appleby
(
Contact Denise)

RELATED FAQS
  1. If an IRA owner dies after starting required minimum distributions (RMD) but the ...

    If the IRA owner dies after the required beginning date (RBD) and his/her beneficiary is his/her spouse, the spouse beneficiary ... Read Answer >>
  2. How long does an IRA beneficiary have to take an RMD after the IRA holder dies?

    Let's suppose the IRA holder, we'll call him Tom, dies in 2008. If Tom was required to take a required minimum distribution ... Read Answer >>
  3. What is the "stretch IRA" concept?

    The "stretch IRA" is not a new IRA account on the market, or even a new investment concept, it is simply a wealth transfer ... Read Answer >>
  4. Can the non-spouse beneficiary of an IRA name a successor beneficiary?

    Whether the beneficiary of an individual retirement account (IRA) can name a successor beneficiary (second generation beneficiary) ... Read Answer >>
  5. Where can I find information on how to distribute my deceased parent's assets?

    Related information can be found in IRS publication 590. See page 32 (bottom right hand corner) and page 35. If the trust ... Read Answer >>
Related Articles
  1. Retirement

    Distribution Rules For Inherited Retirement Plan Assets

    If you've recently inherited a retirement plan, you must get to know the rules for distributing the funds.
  2. Retirement

    A Look At IRA Separate Accounting Rules

    If you are a younger multiple beneficiary, make sure you understand the RMD regulations.
  3. Financial Advisor

    Why You Need to Find the Right IRA Beneficiary

    It definitely matters who you pick as your IRA beneficiary—and how you go about it. And in some cases, your best option may be to go with a trust.
  4. Retirement

    6 Important Retirement Plan RMD Rules

    Paying taxes is inevitable - that's why you need to learn about the rules for required minimum distributions.
  5. Retirement

    Designating A Trust As Retirement Beneficiary

    Designating a trust as your IRA beneficiary can be beneficial, but it requires proper planning to avoid problems.
  6. Retirement

    5 Retirement Plan Moves To Make Before Year-End

    Make sure all your loose ends are tied with these simple reminders and tips for your plans.
  7. Financial Advisor

    An Overview Of Retirement Plan RMDs

    Make your deadlines for required minimum distributions and save more of your nest egg.
  8. Retirement

    Preparing For Retirement Plan RMD Season

    Paying taxes is inevitable - that's why you need to learn about the rules for required minimum distributions.
  9. Retirement

    3 Deadlines For Retirement Plan Beneficiaries

    To take full advantage of new RMD regulations, beneficiaries need to take action before important deadlines.
  10. Retirement

    Inheriting an IRA: Tax Rules You Should Know

    Don’t get hit with a 50% penalty because you don’t know the required minimum distribution (RMD) rules for IRA beneficiaries.
RELATED TERMS
  1. Five-Year Rule

    If a retirement account owner dies before the required beginning ...
  2. Required Beginning Date - RBD

    The date by which a qualified plan participant or IRA owner must ...
  3. Inherited IRA

    An individual retirement account that is left to a beneficiary ...
  4. Stretch IRA

    An estate planning concept that is applied to extend the financial ...
  5. Required Minimum Distribution - RMD

    The amount that Traditional, SEP and SIMPLE IRA owners and qualified ...
  6. Extended IRA

    An IRA that allows a second generation beneficiary to continue ...
Hot Definitions
  1. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  2. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  3. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
  4. Yuppie

    Yuppie is a slang term denoting the market segment of young urban professionals. A yuppie is often characterized by youth, ...
  5. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
  6. Four Percent Rule

    A rule of thumb used to determine the amount of funds to withdraw from a retirement account each year. The four percent rule ...
Trading Center