Reply To: Incorrect coding after 1035 on inherited non-qualified annuity with RMD

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#1900
DTASFAB
Participant

I just called and they are saying the contract is coded properly in their system, but what I see when I log into my account at nationwide.com is not as comprehensive as what they have on their back end. They told me the August 2018 distribution will in fact have the death code on the 1099-R that is to be issued in the coming weeks and I have nothing to worry about.

HOWEVER, I asked them what divisor they used to calculate the 2018 RMD amount, and they said 44.6, which we talked about on the previous forum. My father died in 2012 and I was 34 the following tax year in 2013, and according to Table I on 590-B, my life expectancy that year was 49.4 years.

According to both you Alan, and my CPA who has been doing my taxes every year since 2012 (and also filed my father’s final 2012 return after his death), the beneficiary uses the life expectancy in the year following death (in this case 2013) and subtracts one full year for each subsequent tax season. In other words, my 2013 life expectancy of 49.4 years is set in stone for the rest of my life, and the divisor in all subsequent years should always end in .4 as a result of subtracting exactly one full year from the previous life expectancy divisor. Therefore, the 2018 divisor should have been 44.4, not 44.6, despite the life expectancy for a 39 year old in Table I being 44.6 years.

Was I confused about this rule? Does it only apply to inherited traditional IRAs and not to inherited non-qualified annuities?

A Nationwide inquiry was opened and I was told I would receive a call back within three hours of when the investigative department opens the inquiry, which may or may not happen today.

  • This reply was modified 2 years, 8 months ago by DTASFAB.