Inherited IRA
IRA account owner dies before his RBD.
Non-spouse beneficiary does not take RMD’s during the 5 years subsequent to the owner’s year of death.
Non-spouse beneficiary does not withdraw all of the assets by December 31st of the 5th year subsequent to the owner’s year of death.
What are the consequence (penalties/interest) for failing to take RMD’s and/or withdraw the assets before the required date?
Permalink Submitted by Alan - IRA critic on Tue, 2019-07-30 20:41
Most IRA agreements specify the default method as LE, and the IRS has ruled in PLR 2008 11028 that the stretch could be preserved by making up the missed LE RMDs to date. Apparently, the IRS has also been granting the penalty waiver in addition with a properly filed 5329. Therefore, the best outcome can probably be achieved by making up the late RMDs and filing a 5329 for each year, then continuing the LE stretch going forward.