Inherited IRA and the year after mom's death am rolling it over. 2 RMD questions

[annon1]

My mom died in 2025. I took her remaining RMD in 2025.

In 2026 I am rolling it over into another inherited IRA at a different company. The company that has it says that I have to take my 2026 RMD out of the that money for before they will roll it over. And they will add an RMD for any money that is earned in 2026 as well rather than just year end balance for 2025. Is that correct? I was presuming the company I rolled it over to would figure my entire 2026 RMD.

Also I know I have to empty it in 10 years and this is what I understand from reading the IRS website about RMD's (thus the minimum I need to take out)

1) year of her death take any remaining RMD not taken using mom's RMD

2) year two I can take either my RMD or mom's age minus 1 and that RMD.

Thanks

[dmertz · Accepted solution]

Are you sure that the inherited account that you will be moving is an IRA?  Inherited IRAs are not permitted to be moved by rollover, only by nonreportable trustee-to-trustee transfer.  When making a trustee-to-trustee transfer of an IRA, the IRA custodian cannot require than an RMD be paid out, so it seems doubtful that this account is an IRA.

Perhaps the inherited account is actually an account in an employer plan like a 401(k).  In that case the company is correct that the account can be moved to an inherited IRA by direct rollover and that they must pay out the 2026 RMD before doing so.

"And they will add an RMD for any money that is earned in 2026"

I don't know what you mean by that.  Investment gains earned in 2026 have no bearing on the calculation of the 2026 RMD.  Investment gains earned in the original account in 2026 will simply be moved to the inherited IRA.

"2) year two I can take either my RMD or mom's age minus 1 and that RMD."

No, it's based on your single-life expectancy for your age in 2026, reduced by 1 each year after 2026.  It would be based on your mother's age only if you were older than your mother, which is highly implausible.  The RMD is the minimum amount that must be taken.  You just have to take out at least that much, you can always take out more.  2026 is year one for receiving beneficiary RMDs.  2035 will be year ten.