Are we sure that inherited IRA’s do not have to take RMD in 2020
Read this in Barron’s today
Q: Are beneficiary IRAs subject to taking RMDs or can they be deferred?
“Without specifically addressing RMDs from inherited IRAs, the language of the Cares Act suggests that the provisions waiving the requirement to take minimum distributions in 2020 should also apply to inherited IRAs,” says Frederick Schoenbrodt, II, principal at the law firm of Bressler, Amery & Ross.
While he notes that there may be further guidance to clarify this point, for now it seems that beneficiaries of inherited IRAs should be able to skip RMDs this year.
To me, this guy doesn’t seem 100% convinced that inherited IRA’s won’t have to take the RMD in 2020.
Permalink Submitted by Bruce Steiner on Wed, 2020-04-01 16:50
Yes. See pages 167-168 of the bill: https://www.appropriations.senate.gov/imo/media/doc/FINAL%20FINAL%20CARES%20ACT.pdf . Note that Section 401(a)(9), which the bill amends, covers both IRA owners and beneficiaries of inherited IRAs.
Permalink Submitted by Alan - IRA critic on Wed, 2020-04-01 16:53
He should be. FIrst, the waiver applies to RMDs for account types, not for ownership types. Inherited accounts fall under the same code section as owned accounts. Second, there is a specific provision for extending the 5 year rule if it applies and such rule only applies to inherited account RMDs.
Permalink Submitted by Robert Wright on Wed, 2020-04-01 17:42
Alan, Does the RMD waiver apply to 403(b) plans and non-qualified annuities?
Permalink Submitted by Alan - IRA critic on Wed, 2020-04-01 18:05
The waiver applies to 403b plans, but not to NQ annuities since NQ annuities are not subject to the RMD requirements of Sec 401(a)(9). They are subject to the contract or state law requirements.