I have several IRAs and now have to start taking rmds. The IRS says to figure the rmd for each one and I can add them together, then take the RMD from one if I want. Why can't I just add them all together then figure the rmd and use that figure to take my rmd from one? They are all over 5 years old.
The reason that you are told to compute the RMD for each account is that not all IRA accounts use the same life expectancy. There are three life expectancy tables published. Basically, one is for beneficiaries, one is for an owner that has a spouse more than 10 years younger and the spouse is the sole beneficiary, and the other is for everybody else.
So.... for example, if you are single and the owner (not a person who inherited the IRA) of five Traditional IRA accounts, then you could add up the year-end assets and compute the RMD from that total as you would be using the same life expectancy in all 5 calculations.
Not entirely on point; as distributions from IRAs where the taxpayer is a beneficiary cannot be combined; however the different RMD percentage for IRA accounts where the beneficiary is a (current) spouse more than 10 years younger than the owner is sufficient to require a determination of RMDs separately on the different "accounts".
-- Arthur L. Rubin CRTP, AFSP in Brea, CA.
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