Beneficiary IRAs and Required Minimum Distributions
If you receive a (non-spousal) Beneficiary-traditional IRA as a beneficiary due to death, is there a way to avoid taking a Required Minimum Distribution until your own retirement age? Or are you always required to take an RMD regardless of your current age?
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One note to add to Alex' - The RMD divisor for a beneficiary is decremented by one each year, the table is not consulted each year as an over 70-1/2 account holder (of own account) would. A small, but important, distinction.
The IRS does not let you defer withdrawals from a traditional IRA inherited from someone other than your spouse until your retirement age.
IRS Pub 590
If you inherit a traditional IRA from
anyone other than your deceased
spouse, you cannot treat the inherited
IRA as your own. This means that you
cannot make any contributions to the
IRA. It also means you cannot roll
over any amounts into or out of the
inherited IRA. However, you can make a
trustee-to-trustee transfer as long as
the IRA into which amounts are being
moved is set up and maintained in the
name of the deceased IRA owner for the
benefit of you as beneficiary.
Like the original owner, you
generally will not owe tax on the
assets in the IRA until you receive
distributions from it. You must begin
receiving distributions from the IRA
under the rules for distributions that
apply to beneficiaries.
...
If the
beneficiary is an individual, to
figure the required minimum
distribution for 2010, divide the
account balance at the end of 2009 by
the appropriate life expectancy from
Table I (Single Life Expectancy) in
Appendix C
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