topic Re: Does inherited IRA get aggregated? in Retirement tax questions

Does inherited IRA get aggregated?

Username5 — Sat, 22 Jan 2022 02:10:54 GMT

I am taking an RMD on traditional IRA.

I am taking an RMD on inherited IRA from a parent.

1) TTax asks value of "traditional, SEP & Simple IRA" at end of year. There is no mention of inherited. Is the Inherited value to be included in the entry of value?

2) Can the RMD for Inherited IRA be aggregated with my Traditional?

Re: Does inherited IRA get aggregated?

MaryK4 — Mon, 24 Jan 2022 22:38:54 GMT

Amounts in IRAs that an individual holds as a beneficiary of the same decedent and which are being distributed under the life expectancy rule in section 401(a)(9)(B)(iii) or (iv) may be aggregated, but such amounts may not
be aggregated with amounts held in IRAs that the individual holds as the IRA owner or as the beneficiary of another decedent. 26 CFR 1 § 1.408–8 (4–1–11 Edition)

@Username5

[Edited 1/24/22 I 2:37 pm PST]

Re: Does inherited IRA get aggregated?

fanfare — Sat, 22 Jan 2022 03:30:53 GMT

@Username5 @MaryK4 Expert

This is just so completely wrong and bad advice.

@Username5

You must treat an inherited IRA separately from all other IRAs of your own.

If you inherit another IRA you must treat that one separately from the first one.

@MaryK4

You need a refresher on IRA distributions.

Re: Does inherited IRA get aggregated?

Username5 — Sat, 22 Jan 2022 06:00:42 GMT

Thank you. I was going to post a followup but you sorta answered this for me.

The inherited TIRA is based on a factor of my age at my parents death, prior to my age of first RMD.

Since my inherited TIRA is calculated at a different drawdown than my personal TIRA it doesn't make sense to lump them together. I don't know how the IRS ensures that the numbers are correct but if they take the prior year return Dec 31st value to check, it would not work out correctly.

So unless I and @fanfare are incorrect, I will not lump my inherited TIRA into my own TIRA for purposes of year end value. TTax does not ask the value of my inherited TIRA at EOY so I don't know how the IRS verifies the reporting.

Re: Does inherited IRA get aggregated?

fanfare — Sat, 22 Jan 2022 06:42:07 GMT

what year did you inherit this IRA?

If it is under the old rules, (before 2020) you have to take an RMD every year, based on your divisor.

Once set, your divisor reduces by 1 each year.

If it is under the new 10-year rules (after 2019) you do not.

You can take any amount or nothing, until the end of the tenth year.

Since you are asking questions I would assume it is recent, and you are under the 10-year rules.

Re: Does inherited IRA get aggregated?

Username5 — Sat, 22 Jan 2022 06:49:28 GMT

It was under the old rules. And then, as I understand it, thiss year I must adjust the divisor (of all TIRA accounts) for a new life expectancy table that was released. In the case of the inherited TIRA, it changed by ~2 points, reducing the RMD slightly.

Re: Does inherited IRA get aggregated?

fanfare — Sat, 22 Jan 2022 13:58:33 GMT

Once set (it is an integer), your inherited IRA divisor reduces by exactly 1 each year.

You should reread the section on inherited IRAs in Pub 590-B.

You don't use the Table III life expectancy divisor.

Re: Does inherited IRA get aggregated?

Username5 — Sat, 22 Jan 2022 19:12:27 GMT

Got it, thanks again. Had to slog through a draft edition and found that I had figured it correctly. And my spreadsheet matches the number from financial institution. I appreciate your guidance.

Re: Does inherited IRA get aggregated?

Username5 — Sat, 22 Jan 2022 20:34:58 GMT

Got it, thanks again. Had to slog through a draft edition and found that I had figured it correctly. And my spreadsheet matches the number from financial institution. I appreciate your guidance.