@dmertz wrote:
In this case the SECURE Act changes do not apply because the first beneficiary died prior to 2020. Assuming that the first beneficiary was not the spouse of the original participant, the second beneficiary would simply continue the RMD schedule of the first beneficiary, continuing to reduce the life-expectancy factor by 1 each year. However, the life-expectancy factor for the first beneficiary in 2017 needs to be re-determined using the Single Life Expectancy table that was updated in 2022.
To provide a specific answer requires knowing the year that the original participant was born, the year that the first beneficiary was born and whether the first beneficiary was the spouse of the original participant.
The single life expectancy table is located in publication 590-B, appendix B.
https://www.irs.gov/publications/p590b
Here's how the calculation would work.
Suppose the first beneficiary was age 54 in 2016 when the original owner passed. Their first RMD as a beneficiary was due in 2017 when they were 55. Their single life expectancy using the current table would be 31.6. Then, instead of using the table every year, you just reduce by 1. So in 2018, the RMD would be based on a factor of 30.6. In 2019, 29.6. And so on. So for 2024, the RMD would be based on a factor of 24.6. Even though your life expectancy might be different, you follow the schedule that was established based on the life expectancy of the first heir.
If the factor is 24.6, then the RMD for 2024 is the account balance on 12/31/2023 divided by 24.6.
Use the table in 590-B and the age of the first beneficiary in 2017 to determine what factor you must use.
