RMD from Inherited IRA for 2022
I’ve seen so many different discussions and ideas thrown around, by Congress and the IRS, about this topic, that now I’m really confused. Client dies at age 74 in October of 2020 and had been taking distributions from his IRA. Son inherits the IRA and has it in a Beneficiary IRA. Takes significant distributions in 2021 and 2022. Am I correct that he has to have the account exhausted within 10 years? Does he have to take a distribution in 2022? Thanks in advance for any help and assistance on this matter.
Permalink Submitted by Alan - IRA critic on Tue, 2022-12-06 22:11
Due to the IRS delay in drafting the Secure Act Regs which are still not final, the IRS waived certain 2021 and 2022 beneficiary RMDs such as those required by the son in this case. Therefore, these 2021 and 2022 distributions turned out not to be required, but they still helped spread the tax impact over more years of the 10 year period, and these distributions have reduced the account value and therefore the future annual RMDs starting in 2023. Many beneficiaries who want to even out the tax impact over the 10 years will take out even more than the required annual RMDs, which generally are less than an annually pro rated distribution amount. As such even beneficiaries who inherited prior to RBD and do not have to take annual RMDs may end up taking similar or higher distributions voluntarily to level out the tax impact and prevent a large distribution in year 10.