ExpertHard1 markMultiple Choice
CPA · Question 23 · Area I: Individual Compliance and Planning
An individual designates their estate as the beneficiary of their IRA. The individual dies at age 68 (before Required Beginning Date). What is the required distribution period for the IRA assets?
An individual designates their estate as the beneficiary of their IRA. The individual dies at age 68 (before Required Beginning Date). What is the required distribution period for the IRA assets?
Answer options:
A.
10 years (10-Year Rule)
B.
5 years (5-Year Rule)
C.
Life expectancy of the oldest beneficiary of the estate.
D.
Life expectancy of the decedent.
How to approach this question
Identify Beneficiary Type (Estate = Non-Designated). Identify Timing (Before RBD). Result = 5-Year Rule.
Full Answer
B.5 years (5-Year Rule)✓ Correct
B
IRC §401(a)(9). If the beneficiary is not an individual (e.g., an estate), there is no 'designated beneficiary'. If death occurs before the Required Beginning Date (RBD), the entire account must be distributed within 5 years.
Common mistakes
Applying the 10-year rule which is for most non-spouse individuals.
Practice the full CPA TCP Practice Exam 4
68 questions · hints · full answers · grading
More questions from this exam
Q01In Year 1, an executive exercises Incentive Stock Options (ISOs) to purchase 1,000 shares of comp...MediumQ02A taxpayer provides an interest-free loan of $200,000 to their adult child on January 1, Year 1, ...HardQ03A taxpayer, age 15, has $4,500 of interest income and no earned income in Year 1. The taxpayer is...MediumQ04A taxpayer anticipates their marginal tax rate will increase from 24% in Year 1 to 35% in Year 2....MediumQ05A taxpayer is subject to the safe harbor rules for estimated tax payments. Their Year 1 Adjusted ...Medium