¹When a surviving spouse rolls over an inherited IRA, Regs. Sec. 1.408-8, Q&A-5 and 7, state that the RMD is determined under Sec. 401(a)(9)(A) as if the surviving spouse were the owner, rather than a beneficiary. As the owner, Regs. Sec. 1.401(a)(9)-5, Q&A-4, provides that the distribution period is based on the Uniform Lifetime Table.

²The life expectancy tables were amended by TD 8987 (4/17/02).

³Another potential way to avoid the 10% penalty on early rollover distributions is through substantially equal periodic payments for the owner’s life or the joint life expectancies of the owner and his or her designated beneficiary, under Sec. 72(t)(2)(A)(iv); see also Rev. Rul. 2002-62, IRB 2002-42, 710, which has the effect of reducing the substantially equal payment requirement for taxpayers who have already begun distributions. This provides relief for IRAs that have lost value; existing Sec. 72 plans should be reviewed if a slower RMD is desired.

⁴If the deceased IRA owner had not taken a distribution for the year in which he or she died, his or her beneficiary is required to take a distribution (with the RMD being the same as the deceased IRA owner’s) during the year of the IRA owner’s death; see Regs. Sec. 1.401(a)(9)-5, Q&A-4(a). The estate would not get the IRA owner’s final distribution.

⁵An IRA with multiple beneficiaries must be divided into a separate account for each beneficiary, for each beneficiary to use his or her own life expectancy; see Regs. Sec. 1.401(a)(9)-8, Q&A-2(a)(2).

⁶QTIPs and B trusts may be more suitable as beneficiaries of non-IRA or nonretirement assets. Significant income tax acceleration for the beneficiaries may result when they are used as an IRA’s beneficiary.