Beneficiary IRA
Hello,
We have a client that inherited an IRA from her uncle. Her uncle passed in 2019 prior to the Secure act at the age of 72. The funds were moved to a beneficiary IRA in June of 2020. The beneficiary then took distribution in 2020 and 2021. In this case we just want to confirm that she is allowed to hold it as a stretch IRA but has to take RMDs each year from the account?
Any insight would be appreciated.
Permalink Submitted by Alan - IRA critic on Tue, 2022-07-12 14:11
Yes, you are correct. The Secure Act does not affect this inherited IRA until after client passes. Client was responsible for completing uncle’s 2019 RMD if uncle did not complete it, and perhaps that explains the 2020 distribution as 2020 RMDs were waived or were allowed to be returned by August, 2020 if taken early in the year. Her 2022 beneficiary RMD is determined from the new RMD single life table first effective in 2022 after resetting her divisor to reflect the new table.