IRS Notice 2022-53 – Beneficiary IRA

Submitted by Matt Mason on Fri, 2022-12-09 16:35

Client passed away in 2021, Age 75 and already taking RMD’s
Client had satisfied his 2021 RMD
IRA beneficiary is his daughter, funds were moved into her Beneficiary IRA in 2021
Her 10 year distribution runs through 12/31/2031

Am I correct in that, Notice 2022-53 waives her requirement for taking RMD’s for both 2021 and 2022? So she wouldn’t need to take an RMD for this year if she didn’t want to?

I presume this is for the simple fact they have not finalized those “said” updated requirements.

Thanks
Matt



Submitted by Alan - IRA critic on Fri, 2022-12-09 17:21

  • The notice waives her 2022 RMD and would have waived her 2021 RMD had client passed in 2020. But in this case, the 2021 RMD was the client’s, and if client had not completed it, his daughter would have been responsible for completing it in 2021. Daughter does not have to take a 2022 beneficiary RMD or file a 5329 if she does not does not take it, but she still might want to take some distributions to avoid spiking her marginal tax rate in 2031 with a large lump sum distribution.
  • The IRS Notice does not clearly state that these RMDs are waived instead of just postponed to 2023, but it is unlikely they will have to be made up, other than through larger RMDs starting in 2023 due to larger balances from the 2021 and 2022 waivers.

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