IRS Notice 2024-35
The decedant passed in 2021 at age 81 and had both a traditional IRA and a ROTH IRA. The beneficiary is a sibling who is one year older and therefore governed by the 10 year rule. Does the beneficiary have to take a RMD in 2024 from the inherited traditional IRA? from the inherited ROTH IRA? And is the sibling who is a year older considered an “eligible designated beneficiary”? The Slott report included the following statement which puzzled me. “Keep in mind that the new IRS Notice does not affect lifetime RMDs, RMDs from inherited IRAs by “eligible designated beneficiaries,” or RMDs by beneficiaries who inherited before 2020. It only applies to those beneficiaries with annual RMDs within the 10-year period.”
Permalink Submitted by Alan - IRA critic on Mon, 2024-05-06 15:15
For the TIRA the beneficiary is an EDB who is not subject to the 10 year rule. Beneficiary RMDs are required for all years, as EDB RMDs were not waived by the above IRS Notice.
However, for the inherited Roth, because the owner is treated as passing prior to RBD, the beneficiary had the option to opt out of EDB treatment and into the 10 year rule. However, the deadline in this case for election out of EDB treatment would have been 12/31/2022, so the beneficiary is likely an EDB who has missed a couple years of beneficiary RMDs, which must be made up if missed.