The original IRA of $750,000 is multiplied by her total share of distribution (33.33%). Then, her 2021 RMD is divided by her total distribution, which will give you a percentage of RMD taken in the year out of her total distribution. This percentage is then multiplied by $6,666 to come to a deduction of $280.
$750,000 X 33.33% = 249,975
$10,498 / $249,975 = 4.2%
$6,666 X 4.2% = 279.97 ($280)
If I remove the $750,000 from the value of the IRA, the pension and annuity income exclusion increases to $6,666. Since the $20,000 exclusion is annual, please remove the $750,000 estimated IRA value so the proper exclusion can flow to the return.
Per Publication 36, if the deceased individual has more than one beneficiary, the $20,000 maximum amount of the pension and annuity exclusion must be allocated among the beneficiaries. Each beneficiary’s share of the $20,000 exclusion is determined by multiplying $20,000 by a fraction whose numerator is the value of the pensions and annuities inherited by the beneficiary, and whose denominator is the total value inherited by all beneficiaries of the deceased individual’s pensions and annuities. The total exclusion of the deceased individual and all beneficiaries cannot exceed $20,000 annually.
@dovestree21
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