Direct rollover by non-spouse benficiary

[SMB]

Having my first "encounter" with a direct rollover to a non-spouse beneficiary and want to make sure I correctly understand the rules and process (have my doubts).

Facts: Profit Sharing Plan participant died in September, 2008 at age 68 (i.e., before her required beginning date for required minimum distributions). No spouse. Daughter is the participant's "designated beneficiary" and is electing to have the death benefit distributed as an direct rollover to an "inherited IRA" in 2009.

Questions:

1. Must a required minimum distribution be made to the daughter from the Plan for 2009 (i.e., the 2009 RMD amount may NOT be rolled over to the inherited IRA)?

2. If the answer to 1. is "Yes" - is this RMD based on the daughter's attained age in 2009 and her Table 1 - Single Life Expectancy factor?

3. If the answers to 1. & 2. are "Yes", is the RMD for 2010 (from the inherited IRA) based on the daughter's Table 1 - Single Life Expectancy factor for 2009 minus 1?

Am I anywhere close to understanding this correctly? Any there other "aspects/pitfalls" of which I need to be aware?

Thanks!

[Guest Jennyb473]

what was participant's DOB? you indicate she was 68 in September of 2008 - why would she have needed an RMD now? Her RBD would not be until 4/1 of year after she turned 70.5

2009 RMD are waived so no RMD in 2009 regardless

[SMB]

Granted I completely missed the "elephant in the room" - i.e., the RMD "waiver" for 2009 - absent such waiver, is my original analysis anywhere near correct?

Or, it this a "10-foot pole" post - i.e., ain't gonna touch it with...?

Thanks to any and all who bother to reply.

[Guest Jennyb473]

I'm still not sure why you think an RMD would be needed even if the waiver for 2009 didn't exist. You state the participant was 68, RBD is 4/1 after attainment of age 70.5

[QDROphile]

Why would a distribution be required? Rules for distribution to a nonspouse after a participant's death continue apply, not the rules applicable to a noninherited IRA.

[Bird]

Granted I completely missed the "elephant in the room" - i.e., the RMD "waiver" for 2009 - absent such waiver, is my original analysis anywhere near correct?

I think you are correct. I don't understand the questions in the other responses - it's an RMD after death and must start by the end of the year following death, or completely within 5 years. If the daughter wants to spread distributions over her life expectancy, she must start this year (all ignoring the RMD waiver for 2009, of course...I guess it is as simple as allowing the full rollover with no RMD this year, then she starts RMDs from the IRA next year, using life expectancy this year - 1).

[SMB]

QDROphile and Bird -

Thanks for your replies. Much appreciated.

I similarly wasn't sure whether Jennyb473 had a "grasp" of the situation. Hopefully, she will have found this dialog as helpful as have I.

Enjoy your weekend!