Inherited IRA with non-spousal beneficiaries
IRA owner died in 2020. Had 60,000 in his IRA that went to 3 children. One of those forgot about the Inherited IRA. Has not taken any RMDs. The FMV was 21,000 on 12/31/2020. DOB of beneficiary is 8/25/1953. How does she calculate her RMDs and any penalties? This may be a duplicate request. I sent a request yesterday but don’t see it anywhere – so I don’t know if it came through. Thanks
Permalink Submitted by Alan - IRA critic on Wed, 2022-02-09 23:58
Assuming that the child is not disabled, she is subject to the 10 year rule which has no annual RMDs. Her inherited IRA must be drained by 12/31/2030, but she might want to voluntarily take some distributions before then.
Permalink Submitted by Stephen Hodson on Thu, 2022-02-10 00:12
What year did the 10 year rule become effective?
Permalink Submitted by Alan - IRA critic on Thu, 2022-02-10 00:55
For deaths after 2019 with respect to IRAs.
Permalink Submitted by Elizabeth Howe on Mon, 2022-02-21 19:56
My mother passed in 2021 before taking her RMD. I am the sole beneficiary. I informed the bank of my mother’s passing and my beneficiary status. I asked for 2 seperate disburements and wanted federal taxes withheld on both payments. The 1st disbursement was for my mother’s RMD for 2021. The 2nd disbursement closed the account. Both checks were in my name (not my mother’s or her estate). The 1099R issued by the bank has the total of the 2 disburements listed as the gross idstribution. The 1099R is my mother’s name and my mother’s SS number. I don’t believe this is correct and I don’t know how to fix it.
Permalink Submitted by Alan - IRA critic on Tue, 2022-02-22 02:13
The 1099R must be corrected by the IRA custodian to show you as the beneficiary payee and your SSN and must be reported on your return as you received the distributions. Looks like the bank had not updated all the records to conform to the check. If the bank refuses, you could probably use the nominee process to transfer the income from her final return to your return.