Inherited IRA from owners taking RMD and deceased prior to 12/31/2019

Submitted by Leo Nunez on Wed, 2022-08-24 19:53

I have a client who just came to me with two inherited IRA’s, one from his mom and one from his dad where he has not taken any RMD’s.

Based on the dates inherited which were prior to the 2020 rule change my questions are

1. Could he stretch them if they were already taking RMD’s over his life expectancy?
2. What is the best way to remedy that he has not taken any? (Mom passed in 2017 and dad passed in 2019)

Thanks



Submitted by Alan - IRA critic on Wed, 2022-08-24 22:29

  • The IRS has been allowing the life expectancy stretch to be restored once the missed RMD are made up. A 5329 can be filed each year to request waiver of the penalty. Client is also responsible for the year of death RMD if parent was taking RMDs and did not complete the year of death RMD.
  • For IRA inherited from Mom, the missed beneficiary RMDs for 2018, 2019, and 2021 would have to be calculated and distributed, along with the 2022 beneficiary RMD. The 2020 RMDs were waived by the CARES Act.
  • For IRA inherited from Dad, the 2021 and 2022 RMDs would have to be distributed, and a 5329 filed for 2021 to request the penalty waiver.
  • These two inherited IRAs cannot be combined and the RMD for each must be taken separately. 


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