[11552]
January 14, 2000
TO: PENSION COMMITTEE No. 3-00
RE: IRS RELEASES PRIVATE LETTER RULING ON IRA DISTRIBUTIONS
______________________________________________________________________________
The Internal Revenue Service has released a Private Letter Ruling (199951053) allowing
designated beneficiaries to take distributions over the life expectancy of the oldest beneficiary following
the death of the IRA owner, despite the fact that the IRA owner had been taking distributions based on
her single life expectancy using the annual recalculation method.
The facts of the ruling are as follows. The IRA owner elected in 1996, the year of her husband’s
death, to treat his IRA as her own. She also named her three sons as beneficiaries of the IRA. The IRA
owner then began taking distributions from the IRA based on her single life expectancy, recalculated
annually. The IRA owner died in 1998 and, beginning in 1999, her beneficiaries wished to distribute the
remaining amount in the IRA over the life expectancy of the oldest beneficiary, notwithstanding the fact
that the IRA owner took distributions over her single life expectancy, recalculated annually.
The issue is whether post-death distributions from the IRA owner’s IRA may be made over the
oldest beneficiary's life expectancy even though the IRA owner took distributions over her single life
expectancy recalculated over her lifetime without violating the “at least as rapidly" rule of Code section
401(a)(9). The Service ruled that the IRA owner designated her beneficiaries in a timely manner.
Further, the Service stated that the IRA owner could have received distributions over her and her oldest
son’s joint life expectancy during her lifetime. Such distributions would have satisfied the minimum
distribution rules. Instead, she chose to receive distributions over her recalculated single life expectancy.
By choosing to take distributions over her single life expectancy, the Service noted that the IRA owner
received distributions in amounts greater than the minimum distribution rules, i.e., she chose to
accelerate receipt of her lifetime distributions.
Thus, although the IRA owner did not use the oldest beneficiary’s life expectancy in computing
her lifetime distributions, the Service ruled that the oldest beneficiary’s life expectancy may be used to
determine post-death required distributions to the IRA owner’s
beneficiaries. Therefore, the Service ruled that the “at least as rapidly" rule would not be violated if
post-death distributions are calculated using the life expectancy of the oldest son because the IRA owner
could have used his life expectancy to determine the amount of her lifetime minimum required
distributions.
A copy of PLR 199951053 is attached.
Kathryn A. Ricard
Associate Counsel
Attachment