Nonspouse Beneficiaries of Inherited IRAs

The rules are a little complicated. A beneficiary of an inherited IRA must calculate a required minimum distribution (RMD). The RMD is the longer of the nonspouse beneficiary's life expectancy or the owner's life expectancy if the owner died after their RMD beginning date. If the owner died before their RMD beginning date, then you have the option of using the nonspouse beneficiary life expectancy or electing to distribute the IRA by December 31 of the fifth year following the owner's death. A spousal beneficiary can treat the inherited IRA as his or her own so they can wait until they turn age 70 1/2 to start the RMD.