Does the five-year rule apply if a non-spouse inherits an IRA after the required beginning date and the required minimum distribution is not satisfied in the year of death?

By Denise Appleby AAA
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. What does U.S. law say about contingent beneficiaries?

    Learn about regulations the United States has on the naming of contingent beneficiaries, the types of contingencies that ...
  2. Places where I can open an IRA Account?

    Open an IRA through brokerage firms, mutual funds, banks and other major financial institutions, or through large Internet ...
  3. How do I change my contingent beneficiary?

    Learn what life insurance companies and retirement plan accounts require from you to change your contingent beneficiary designations.
  4. What kinds of assets can be included in a revocable trust?

    Understand what types of assets can be included in a revocable trust, and why some asset types are excluded from this estate ...
RELATED TERMS
  1. Contingent Beneficiary

    1. A beneficiary specified by an insurance contract holder who ...
  2. Self Invested Personal Pension (SIPP)

    A tax-efficient retirement savings account available in Great ...
  3. Elder Care

    Elder care, sometimes called elderly care, refers to services ...
  4. Gold IRA

    Definition of Gold IRA
  5. Eligible Transfer

    An IRS-allowed movement of assets into or out of an individual ...
  6. Leveraged Benefits

    The use – by a business owner or professional practitioner – ...

You May Also Like

Related Articles
  1. Trading Strategies

    Top 7 Roth IRA Stocks for 2015

  2. Professionals

    Are Longevity Annuities in 401(k)s a ...

  3. Professionals

    Why Retirement Advice Is Better But ...

  4. Professionals

    Coming Soon: Private Equity In 401(k) ...

  5. Professionals

    Ways To Cut 401(k) Expenses

Trading Center