Beneficiary Question
Hello,
A nephew is the beneficiary on his aunt’s traditional IRA and a IRA BDA for her. She passed away this at age 63. Due to the Secure Act rules is he able to combine bot accounts into one IRA BDA account since the aunt was not of RMD age?
Thank you,
Kevin
Permalink Submitted by Alan - IRA critic on Wed, 2021-09-29 13:35
When did Aunt inherit her inherited IRA, and was it from her spouse, or a non spouse? Nephew is likely under the 10 year rule on the IRA that aunt owned. Most likely these cannot be combined because they are probably under different beneficiary RMD calculations, but the info on aunt’s beneficiary IRA is needed. Finally, if aunt inherited her IRA from a spouse and failed to take her full RMD in any year, she would have defaulted to owning that IRA. And if she owned it, nephew COULD combine the two because they were both owned.
Permalink Submitted by Kevin O'Hearn on Wed, 2021-09-29 13:51
Thank you Alan. The aunt inherited the IRA from her uncle who passed away in 2020. So we would need to set up 2 IRA BDA’s for the nephew and they would need to follow the 10 year rule, no?
Permalink Submitted by Alan - IRA critic on Wed, 2021-09-29 16:13
Unless she was less than 10 years younger than uncle or disabled, the inherited IRA was subject to the 10 year rule requiring full distribution by 12/31/2030, and nephew as the successor beneficiary who inherited an IRA already under the 10 year rule must also drain the account by that same date. But the IRA aunt owned does not have to be drained until 12/31/2031, a year later. Therefore, these accounts cannot be combined, and nephew does not have any year of death RMDs to be concerned with for 2021.