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U.S. Master Pension Guide

The U.S. Master Pension Guide reflects the latest regulations, rulings and cases for qualified retirement plans, surveying the different type of plans from which an employer may choose, and describing the procedures for obtaining plan qualification.

CCH® PENSION AND BENEFITS — 5/22/08

Distributions from decedent’s IRA to beneficiary calculated based on life expectancy of beneficiary

The IRS has privately ruled that the required minimum distributions (RMDs) from a decedent’s two IRAs could be calculated for all past and future years based on the life expectancy of the beneficiary as determined under the Single Life Table of Reg. §1.401(a) (9)-9 . The decedent had two IRA’s with the same designated beneficiary. The beneficiary took several years worth of required minimum distributions in one year, paying the appropriate additional tax for failing to take the RMDs in the years when they should have been taken under the Code.

The failure to timely make Code Sec. 401(a)(9) required minimum distributions did not affect the calculation of required minimum distributions for subsequent years, and did not necessitate the use of the five-year rule of Code Sec. 401(a)(9)(B) (ii), where the taxpayer had not elected the five-year rule.