Annual distribution requirement from non-spouse inherited IRA

I have a client who inherited a traditional IRA from his mother in 2020, so the 10-yr distribution rule applies here. She was already taking RMDs when she died in 2020 as she was in her 80’s. My understanding is that our client needs to take ANNUAL RMDs since his mother had already started taking them. Is this a situation where both annual RMDs are required IN ADDITION TO complete distribution within ten years?

Also, assuming he does need to continue with RMDs each year, which life expectancy table does he use to calculate his annual RMD each year?



The annual RMDs within the 10 year rule are proposed in the recent Secure Act proposed Regs, but this will be controversial and perhaps will not survive the final Regs to be issued late this year. And if this proposal does stick, 2021 RMDs may be exempted, or even 2022 RMDs since this will not be final until late this year. So client will have to monitor the final Regs unless client wants to take annual distributions anyway to spread the taxes and avoid a large tax spike in 2030. In that case the final outcome would not matter other than client’s annual distribution will have to at least cover the beneficiary RMD amount should this proposal stick.  If these RMDs are required client would use the new single life table and client’s age in 2021 with the 2021 divisor reduced by 1.0 each year. I doubt that client will need to make up the 2021 RMD, but if so the old table would be used for that and his age in 2021.

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