Recent Inherited IRA guidance?
Was there new clarification regarding Inherited IRAs and RMDs? It was my understanding the those inheriting IRAs, after the CARES Act, regardless of the age of the decedent, were subject to the 10-year rule. Is there new guidance that says if the decedent reached the RBD prior to death, then the owner of the inherited IRA is subject to RMDs and the 10-year rule?
Permalink Submitted by Alan - IRA critic on Thu, 2022-03-17 16:34
Yes, the new IRS proposed Reg include annual RMDs within the 10 year rule if decedent passed on or after RBD. This provision will generate some controversy, so there is a chance it is changed (again). NOTE: It is the Secure Act that triggered these Regs, not the CARES Act. Also, this will not apply to inherited Roths IRAs because all Roths are treated as inherited prior to RBD (because there is no RBD for Roth owners). And for inherited TIRAs subject to the 10 year rule, many beneficiaries will choose to take out incremental amounts each year anyway to avoid a large taxable RMD in year 10 which could trigger a higher marginal rate.