Successor Inherited IRA clarification
A person passed away (post 2019), leaving account to a non – spouse relative. That relative subsequently passes away within a year of first person, but never named beneficiaries.
My question is does the new Inherited IRA for the estate need to be depleted in 5 years, or does it keep the original 10 year timeframe from the original Inherited IRA?
Permalink Submitted by Alan - IRA critic on Mon, 2023-07-03 21:16
The original 10 year rule deadline still applies and if the original owner passed post RBD, the annual RMD schedule in years 1-9 must also be continued with a 1.0 divisor reduction each year and adjustment to the new 2022 RMD tables as well. In other words the estate is treated just like an individual successor beneficiary. The IRS has waived the penalty if no annual RMD was taken in 2021 and 2022. The executor may wish to assign the inherited IRA out of the estate to the individual estate beneficiaries in order to close the estate without a lump sum distribution, but this does not affect the RMD schedule for those inherited IRAs.