Inherited IRA where beneficiary is a sibling and under 59 1/2

Submitted by Brian Smith on Tue, 2016-06-07 18:37

If you have a sibling inherit and IRA and they are under 59 1/2 and want to take out more than the RMD in a calendar year, I assume they can do so without the 10% early withdrawal penalty.



Submitted by Ben Meyer on Wed, 2016-06-08 00:37

  • The 10% penalty does not apply when any distribution is made from an inherited IRA for a non-spouse beneficiary.  (For a surviving spouse who assumes ownership, transferring the IRA into his/her own IRA, the penalty would apply for distributions when the surviving spouse is under 59 1/2, but that isn’t the situation you described.)
  • The recipient should receive a form 1099-R with code 4 in box 7 in January of the next year, so filing of form 5329 should not be required.

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