Ask the Expert: Take the first annual distribution

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Only a surviving spouse can postpone taking annual

Only a surviving spouse can postpone taking annual required distributions from an inherited IRA. Photo Credit: iStock

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Lynn Brenner Lynn Brenner

Brenner answers questions about all aspects of family finance.

My mom died in 2009 at age 78. I converted her IRA to my name and I get statements as the beneficiary. Was I supposed to start taking annual withdrawals the December after she passed away? Or can I wait till I am 701/2? The brokerage says I can wait, but I'm getting conflicting information.


You should have taken the first annual distribution by Dec. 31 of the year after your mother's death.

The penalty for not taking a required minimum distribution is 50 percent of that distribution. But you can ask the IRS for a waiver, says Barry C. Picker, a Brooklyn tax accountant and IRA expert. His advice: Use the Single Life Expectancy Table in IRS Publication 590 to calculate the missed distributions for 2010, 2011 and 2012, and the 2013 distribution, and withdraw that amount immediately. File IRS Form 5329 (the relevant section is Part VIII) with your 2013 tax return. "Send Form 5329 without computing or paying the 50 percent penalty for missed distributions with a cover letter requesting a waiver on the grounds that you didn't know the rules," says Picker.

Unfortunately, you may have a second problem. It's unclear from your letter whether the IRA custodian correctly listed you as the beneficiary on this inherited account, or mistakenly listed you as its new owner. The fact that you were told you don't have to take distributions until after age 70 suggests you may be listed as the owner. If so, the account is no longer an IRA and the entire balance is taxable. However, there may be a fix. If no money has been added to the account, Picker says the custodian can rectify the error.

The bottom line Only a surviving spouse can postpone taking annual required distributions from an inherited IRA.

Websites with more information and

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TO ASK THE EXPERT: Send questions to Ask the Expert / Act 2, Newsday Newsroom, 235 Pinelawn Rd., Melville, NY 11747, or email Include your name, address and phone number. Questions can be answered only in this column. Advice is offered as general guidance. Check with your own advisers for your specific needs.

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