minor grandchild inherits IRA before required beginning date
New client, rolling into an inherited IRA. He is 10 years younger than grandparent (which makes him not an eligible beneficiary, I believe). The more I read, the more confused I get (Ugh). Does child fall into 10-year rule? No stretch? It is a sizeable account, any tax strategies?
Permalink Submitted by Alan - IRA critic on Tue, 2024-04-02 04:11
Unless the GC is disabled or chronically ill, he is subject to the 10 year rule. About all he can do is try to use each year to roughly equalize his distributions (there may be 11 such tax years) to control the marginal tax rate. The kiddie tax might come into play for some of these years, further increasing the marginal rate and adding complexity.