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Kathleen ReynoldsKeymasterNovember 3, 2022 at 10:25 pmPost count: 428
See below image for details on input options.
- Number of Beneficiaries: Enter up to 10 different non-spousal beneficiaries.
- Illustrate 10 Year Rule: When the SECURE Act was enacted, non-exempt beneficiaries are required to distribute the inherited IRA within 10 years of the anniversary of the plan owner’s death. This option allows you to select between lump sum in the 10th year, or equal payments (with growth) over the 10 year period.
- Separate Accounts Rule: If multiple beneficiaries are considered, the separate accounts rule can be applied if all beneficiaries are individuals and the separate accounts need to be established by December 31 of the year after the plan owner’s death. If separate accounts are not established by the deadline, distributions must be based on the oldest beneficiary.
- Estate AGI: This input is only necessary to compute taxes on distributions going to “Estate”.
- Name: Enter the name of the beneficiary
- Birthdate: Enter the birthdate of the beneficiary. This will be used to determine the required minimum distributions, as well as if the beneficiary is exempt (Not more than 10 years younger rule).
- Inherited Percentage: Enter a percentage up to 100%. If you designate a percentage for a beneficiary which would exceed 100% for the sum of beneficiaries for the plan owner, the system will change the percentages for the calculation to not exceed 100%. In this case, the last beneficiary entered for the owner would be modified for the calculations. For example: You enter 50% for beneficiary 1, 30% for beneficiary 2, and finally 30% for beneficiary 3 – the program will adjust the last percentage to 20% in the calculations, but will not autocorrect on screen. At some point, Brentmark will automate the percentages. Additionally, if you designate percentages that sum to less than 100%, the difference between 100% and the sum of entered percentages would be designated to “Estate”. For example, if beneficiary 1 is set to 50%, beneficiary 2 is set to 40%, and no other beneficiaries are entered, then the remaining 10% would be designted to “Estate”.
- Adjusted Gross Income: Each beneficiary has their own unique tax calculation, but all assume status of Single, with one exemption.
- Disabled or Chronically Ill: If the nonspousal beneficiary is disabled or chronically ill, the beneficiary will be exempt from the 10 Year rule from the SECURE Act of 2019.
- Legal Minor Child of Owner: If the nonspousal beneficiary is a legal minor child of the owner, the beneficiary will be deemed exempt until the beneficiary reaches the age of majority for the domicile.
- Age of Majority: If the nonspousal beneficiary is a legal minor child of the owner, enter the age at which the beneficiary will reach the age of majority.
- Plan Owner: Select the plan owner for which the beneficiary will be applied to. If you have selected “Spouse” above, this will be a contigent beneficiary designation for the plan owner if the plan owner is the surviving spouse. Selecting “Both” will mean that the beneficary will apply to both plan owners.
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