Combine Inherited IRAs from Father and Mother??
I’m aware that, in the past, this was not allowed. Just wondering if there’s been any recent update to change the rule.
Scenario = Both Father and Mother passed away in late 2021 at age 91 and 89 respectively. They had obviously been taking RMDs for many years.
Their only son is now inheriting their IRAs. Dad had (2). Mom had (1).
I understand the son can combine both of Dad’s into 1 Inherited IRA.
The question is whether he can transfer Mom’s IRA into that same Inherited IRA? Leaving Son with only 1 Inherited IRA.
Or, will he need to set up a 2nd Inherited IRA for Mom’s account?
Thanks, in advance, for your expertise.
Permalink Submitted by Alan - IRA critic on Wed, 2022-04-06 21:08
The proposed Regs do not change the requirement that only IRAs inherited from the same decedent can be combined. Therefore, son will have to maintain a separate inherited IRA from each parent even though his two 10 year rules will run concurrently. And since parents passed after their RBD, the proposed Regs will also require son to take out an annual RMD based on his single life expectancy for years 1-9. Son must also complete the 2021 RMD for each parent to the extent parent did not complete that RMD before passing. Since they passed late in 2021, there was probably no time to look into the 2021 RMD and take the distribution before year end. If it remains undistributed, son will have to file a Form 5329 requesting that the IRS waive the late penalty for 2021, which they will do.
There will be additional complexity if Dad did not own both of his two accounts, eg owned one and the other one he maintained as inherited.
Permalink Submitted by Mitch on Thu, 2022-04-07 13:30
Alan,Thank you very much for your thorough and detailed response. I sincerely appreciate your expertise and devotion to this forum. You are a tremendous help!