How are the "Required minimum distribution" calculated?
The IRS has established “two sets of RMD rules that are calculated and distributed separately. An individual taxpayer could be subject to either or both of the Lifetime distributions rules, which apply to the owners of the accounts and or the beneficiary rules that apply to inherited accounts."
The lifetime distribution rules generally become effective when an individual turns age 70½. But a beneficiary of any age is subject to the beneficiary rules for inherited retirement accounts.
The RMD is calculated separately for each qualified plan and IRA, and the RMD from a qualified plan must come from the qualified plan. The RMD for all owned IRAs can be aggregated and come out of any owned IRA. RMD for IRA amounts held as the owner cannot be aggregated with amounts held as a beneficiary.
It is worth noting that each year’s RMD is calculated independently, and that no credit can be taken in the current year for prior year distributions that exceeded the required amount.