Inheriting an inherited IRA
A client received an IRA from his father in 2016, made it an Inherited IRA(taking RMD’s). Client passed away in 1/2021, what does the Inherited IRA become to his spouse and how are RMD’s calculated?
A client received an IRA from his father in 2016, made it an Inherited IRA(taking RMD’s). Client passed away in 1/2021, what does the Inherited IRA become to his spouse and how are RMD’s calculated?
Permalink Submitted by Alan - IRA critic on Wed, 2021-02-17 21:01
His spouse is a successor beneficiary and cannot roll over the inherited IRA into their own. The 10 year rule applies when a designated beneficiary passes after 2019. Therefore, client’s spouse will not have any annual RMDs but will have to drain the account by 12/31/2031. The spouse will also have to complete client’s 2021 beneficiary RMD this year if client did not complete it before passing.
Permalink Submitted by Andrew Jensen on Wed, 2021-02-17 22:09
Thank you.