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Term Certain or Adjusted Term Certain for Heirs when inherited after R


Guest Dale

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When a nonspouse beneficiary inherits an IRA after the RBD (joint life expectancy, owner's life recalculated and beneficiary's term certain) what is the proper method of determining the RMD? Pub 590 page 25 under "If you die and your designated beneficiary is not your spouse" states that the heir must use his life expectancy as adjusted by the single table. (Start with the joint life expectancy in the year of 70.5, subtract the number of years that have elapsed, find the closest to, but less than figure in Table I). This is quite different than Section 1.401(a)(9)-1 Q & A E-8 Example 2. In the reg, you simply subtract the number of years that have elapsed from the intial joint life expectancy.

Also, has anyone noticed the error in this Example 2 of E-8?

"The calculation of the minimum payment for 1989 is as follows:

1) Life expectany of brother (DOB 7-20-1920) (using age as of birthday in calendar year 1988 from Table V of section 1.79-9) = 18.4"

1987 was the year of 70.5 in the example. 1988 was the year of death. The life expectancy of 7-20-1920 brother would be 17.6 when 68 years old not 18.4 as stated.

Do you agree that the error is in the year? 1988 should read 1987--the year of 70.5. Right?

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