This post has been closed and is not open for comments or answers.

IRA inherited from parent - Questions re: Decedent's 2011 RMD, Heirs' RMDs, etc.

My father died this year, and my sister and I inherited a traditional (non-Roth) IRA from him.

Am I correct in my understanding that:

1. Since he didn't take out his 2011 RMD prior to his death, that amount must be distributed from my inherited IRA OR from hers OR from a combination of the 2 (part from 1 and the remainder from the other).

2. Since he died "After Required Beginning Date", for 2012 and the following years, my sister and I must each base our RMD on our own "single life expectancy" (as shown on IRS Publ. 590 Table I),
but have no 2012 RMD of our own.

Also, regarding my father's 2011 RMD, am I correct in my understanding that:

3. If both my sister and I are planning on withdrawing (in 2011) an amount greater to or equal to his 2011 RMD, whose inherited IRA the 2011 RMD is taken from (mine, hers, or a combination) is of no net tax consequence.
(Since no federal estate tax was paid, neither of us can take a federal estate tax deduction on our personal income tax returns.)

Lastly, am I correct in that:

4. For 2011 and all following years, as long as I take an amount greater to or equal to my RMD, there is no penalty. (Taxes yes, but no penalty.)
    1. Since he didn't take out his 2011 RMD prior to his death, that amount must be distributed from my inherited IRA OR from hers OR from a combination of the 2 (part from 1 and the remainder from the other).

    Yes, but would take the RMD out pro-rated just to be on the safe side.  I couldn't find any official guidance on this but it just seems like the safe thing to do; less chance of the IRS to see any income "manipulation" in the process.

    2. Since he died "After Required Beginning Date", for 2012 and the following years, my sister and I must each base our RMD on our own "single life expectancy" (as shown on IRS Publ. 590 Table I), but have no 2012 RMD of our own.

    I'm confused by that statement.  Each of you do have an RMD based on your individual life expectancies.  You'd begin in 2012.

    3. If both my sister and I are planning on withdrawing (in 2011) an amount greater to or equal to his 2011 RMD, whose inherited IRA the 2011 RMD is taken from (mine, hers, or a combination) is of no net tax consequence.

    Subject to my answer to 1. above, any distribution beyond the 2011 RMD would be up to you.

    4. For 2011 and all following years, as long as I take an amount greater to or equal to my RMD, there is no penalty. (Taxes yes, but no penalty.)

    Yes.

    Tom Young
    • Thank you TomYoung.

      For #1, by "pro-rated", do you mean "from a combination of the 2 (part from 1 and the remainder from the other)."

      And it looks like I made a "type-o" in #2. Rather than ""no *2012* RMD of our own.", I meant "no 2011 *RMD* of our own.", as in:

      #2. Since he died "After Required Beginning Date", for 2012 and the following years, my sister and I must each base our RMD on our own "single life expectancy" (as shown on IRS Publ. 590 Table I),
      but have no *2011* RMD of our own."
    Here is perhaps some clarifying information ...
      
    Regarding an inherited IRA, the "owner" of an inherited IRA is not established (for IRS purposes) until September of the year FOLLOWING the year of death of the original owner.  This is true even though you may have actually inherited an IRA in 2011.  Your ownership (and any required RMD's based on YOUR age) would not be established until 2012 if the original owner passed away in 2011.  This provision makes certain that the deceased original owner's RMD for 2011 must be withdrawn based on that person's age (or what the age would have been at year-end 2011) and the account value at year-end 2010.  Having satisfied that the original owner's RMD for 2011 was made part of his/her tax return for 2011, the heirs then must begin their own RMD's starting in 2012 based on their own ages in the Single Life Expectancy Table (Table I) in Pub 590.