Generally, if the owner of an IRA dies after December 31, 2019, and before beginning required minimum distributions, a non-designated beneficiary must: Begin to take the required minimum distributions when the beneficiary turns 70½. Take the entire amount in lump-sum in the year after the year of death. Take the entire amount of the account balance within five years after the year of death. Take the entire amount of the account balance within ten years after the year of death.

Generally, if the owner of an IRA dies after December 31, 2019, and before beginning required minimum distributions, a non-designated beneficiary must: Begin to take the required minimum distributions when the beneficiary turns 70½. Take the entire amount in lump-sum in the year after the year of death. Take the entire amount of the account balance within five years after the year of death. Take the entire amount of the account balance within ten years after the year of death.

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter19: Deferred Compensation

Section: Chapter Questions

Problem 44P

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Sunrise Industries wishes to accumulate funds to provide a retirement annuity for its vice president of research, Jill Moran. Ms. Moran, by contract, will retire at the end of exactly 12 years. Upon retirement, she is entitled to receive an annual end-of-year payment of $42,000 for exactly 20 years. If she dies prior to the end of the 20-year period, the annual payments will pass to her heirs. During the 12-year “accumulation period,” Sunrise wishes to fund the annuity by making equal, annual, end-of-year deposits into an account earning 9% interest. Once the 20-year “distribution period” begins, Sunrise plans to move the accumulated monies to an account earning a guaranteed 12% per year. At the end of the distribution period, the account balance will equal zero. Note that the first deposit will be made at the end of year 1 and that first distribution payment will be received at the end of year 13. How large a sum must Sunrise accumulate by the end of year 12 to provide the 20-year,…