22 THE QUEENS COURIER • MAY 31, 2018 FOR BREAKING NEWS VISIT WWW.QNS.COM
Untangling the Inherited IRA Rules
BY JOHN SAVIGNANO, CPA
Distributions from inherited
traditional IRAs present a
number of questions.
Generally, when owners of
a traditional IRA reach 70
½ , they must take required
minimum distributions
(RMD) based on their life
expectancy.
When a deceased owner
passes an IRA to her beneficiaries,
the beneficiaries
may be required to withdraw
similar RMD amounts
as well.
Spouses who inherit an
IRA generally have three
options: 1) treat the inherited
IRA as their own, 2)
roll over the funds, or 3)
treat themselves as a beneficiary.
The application of the
inherited IRA rules for
nonspousal beneficiaries
depends on whether the
decedent died before or
after taking any RMD. If
the decedent died after the
RMD payments began, then
the beneficiaries must take
RMD payments based on
the longer of the decedent’s
life expectancy or the beneficiary’s
life expectancy.
If the decedent died before
RMD payments began,
RMD amounts will be based
on either a life expectancy
rule or a five-year rule.
Under the five-year rule,
the beneficiary must withdraw
the entire interest from
the IRA by December 31 of
the year containing the fifth
anniversary of the decedent’s
death.
Non-spousal beneficiaries
cannot roll over amounts,
but they may be able to
transfer the funds via a
trustee-to-trustee transfer to
another IRA designated as
an “inherited” IRA.
John Savignano is a
partner with Savignano
Accountants & Advisors
located at 47-46 Vernon
Blvd., Second Floor, in Long
Island City. If you have any
questions or require additional
information, please
call John at 718-707-0955.
TAX TIPS
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25-59 Steinway Street
Astoria, NY 11103
718-278-3900
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Co-Author of the
best selling book
“Breaking the Tax Code”
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Salvatore P. Candela, EA, ATA, ABA
Enrolled Agent - Tax Advisor
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