Inherited IRA

Submitted by ShipsnGiggles on Fri, 2020-02-21 15:41

T-IRA owner dies in January 2020
Older sibling is 100% sole beneficiary
Is the nonspouse beneficiary subject to the new “10 year payout rule” or can they stretch based off their own life expectancy?
*An exception to the 10 year rule is for “beneficiaries who are not more than 10 years younger” – what payout options are available for a beneficiary who is older than the deceased?

Do they have the option of stretching using their life expectancy? Or the 10 year rule?

All help is appreciated



Submitted by Alan - IRA critic on Fri, 2020-02-21 18:17

Since this beneficiary is not more than 10 years younger, they are an “eligible beneficiary” who can stretch over their remaining single life expectancy.

Submitted by ShipsnGiggles on Fri, 2020-02-21 18:58

the beneficiary have the option to use the 10 year rule therefore no RMD’s for a decade?

Submitted by Alan - IRA critic on Fri, 2020-02-21 19:19

No, the 10 year rule is not an option for an “eligible beneficiary”. However, you might also ask if the IRA owner passed prior to the RBD, can this beneficiary opt for the 5 year rule that they clearly could have done prior to Secure (even though almost no one would have wanted to do that). This isn’t real clear. Another question in this scenario that isn’t clear is whether this eligible beneficiary, in the case of death after the RBD could elect to use the remaining life expectancy of the decedent, also a clear option pre Secure. The decedents life expectancy would be longer than this older beneficiary. The IRS will have to clear these questions up fairly soon.

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