RMD vs 5-Year Rule for Inherited IRA
I have a client who’s father passed away in 2019. The custodian was not informed of his death and so continued distributing RMDs as had been scheduled. The beneficiary (son) now wants to move the funds to an inherited IRA and operate it under the pre-TCJA rules, even though it’s now 3 years after his father died. Is the account subject to the 5-year rule since it was not moved to an inherited IRA before the end of the year after his father’s death? Or does the fact that RMDs were taken based on the father’s life provide an exception allowing the beneficiary to stretch the IRA over his own life expectancy since death occurred in 2019? I’m leaning towards the 5-year rule, but the estate attorney is suggesting a full lifetime stretch is still available.
Permalink Submitted by Alan - IRA critic on Wed, 2022-07-20 13:25