Secure Act beneficiary IRA
In an article today in Advisor Magazine Ed made the statement that the PROPOSED Regulations making annual RMD’s versus all at the end of 10 years was effective now. How can a proposed regulation be effective now?
In an article today in Advisor Magazine Ed made the statement that the PROPOSED Regulations making annual RMD’s versus all at the end of 10 years was effective now. How can a proposed regulation be effective now?
Permalink Submitted by Alan - IRA critic on Wed, 2022-04-20 20:25
It can’t, but Ed probably meant that the proposal itself is intended to be effective in 2022 or in some cases retroactively to 2021. In other words, if annual RMDs are required within the 10 year rule period, the requirement could trigger late RMDs for 2021, as well as a 2022 beneficiary RMD even though the Reg goes final very late in 2022. But the IRS could also waive the 2021 or 2022 beneficiary RMDs, and start the requirement (if it is adopted) in 2023. I see plenty of confusion ahead, and I don’t think the IRS is going to want to see all the penalty waiver 5329 forms they are going to trigger.
Permalink Submitted by David Mertz on Wed, 2022-04-20 22:50
Perhaps there is confusion between proposed regulations and temporary regulations. Temporary regulations are enforceable but expire in three years unless made final. As far as I know, proposed regulations are just published for public comment.
I can’t think of a reason not to simply delay taking a distribution of the would-be RMD until the regulation is made final, assuming that it’s made final before the end of 2022.