IRA Twice Inherited
I will do my best to be as clear and concise with this situation. An IRA was inherited in 2007 by a Daughter from her Mother. In 2021, the daughter passed away and left the now IRAB to her spouse. Does the spouse now inherit this IRAB as a spouse and therefor able to stretch the RMD’s? If so, is which birthday and date of death is used (original depositor or daughter/wife?) Or, since the original depositor is a non-spouse, is this subject to the ten year rule? Thanks!
Permalink Submitted by Alan - IRA critic on Wed, 2021-11-17 19:02
The latter. The original designated beneficiary passed after 2019, so the successor beneficiary is subject to the 10 year rule of the Secure Act. The current successor beneficiary is responsible for completing the 2021 beneficiary RMD of his spouse if that was not completed before she passed. Starting in 2022 there are no longer any annual RMDs, but the inherited IRA must be drained by 12/31/2031. As such to avoid having all the taxable income at the end, the successor might still want to take annual distributions to even out the tax bill, but these are not required.