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Inheriting an IRA and when to make withdrawals

If an IRA owner dies before taking his

If an IRA owner dies before taking his annual required minimum distribution, his heirs must take it for him. Photo Credit: iStock

I've inherited an IRA from a friend who had only withdrawn part of his 2014 required minimum distribution (RMD) before he died. Must I withdraw the rest of his RMD by Dec. 31? If so, is the withdrawal taxable to me, or is it taxable income to his estate? Should the amount be based on his remaining life expectancy or on mine?


You must withdraw the rest of your late friend's 2014 RMD by the end of this year, just as he would have done if he had lived. The amount is based on his remaining life expectancy because it's his RMD, but it is taxable income to you, says Barry C. Picker, a Brooklyn tax accountant.

An annual RMD is calculated by dividing the IRA balance at the previous year-end by the IRA owner's life expectancy. Let's say your friend died at age 92. The Internal Revenue Service "Uniform Lifetime" actuarial table for IRA owners gives a 92-year-old a 10.2 year life expectancy. (Yes, it's very generous.) If his IRA balance on Dec. 31, 2013, was $100,000, his 2014 RMD is $100,000 divided by 10.2, or $9,804. If he had withdrawn only $5,000 this year before his death, you must take out the $4,804 balance by the end of the year.

Your deadline for taking your own first RMD as a non-spousal beneficiary is Dec. 31, 2015. But don't use the same actuarial table to calculate the amount! IRA beneficiaries must use the "Single Life Expectancy" actuarial table. You can find both that table and the "Uniform Lifetime" table for IRA owners in the appendix of IRS publication 590, available at

The bottom line If an IRA owner dies before taking his annual required minimum distribution, his heirs must take it for him.

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