RMD vs 5-Year Rule for Inherited IRA

Submitted by Scott Jensen on Wed, 2022-07-20 02:50

I have a client who’s father passed away in 2019. The custodian was not informed of his death and so continued distributing RMDs as had been scheduled. The beneficiary (son) now wants to move the funds to an inherited IRA and operate it under the pre-TCJA rules, even though it’s now 3 years after his father died. Is the account subject to the 5-year rule since it was not moved to an inherited IRA before the end of the year after his father’s death? Or does the fact that RMDs were taken based on the father’s life provide an exception allowing the beneficiary to stretch the IRA over his own life expectancy since death occurred in 2019? I’m leaning towards the 5-year rule, but the estate attorney is suggesting a full lifetime stretch is still available.



Submitted by Alan - IRA critic on Wed, 2022-07-20 13:25

  • Yes, the IRS has been allowing a beneficiary to preserve the stretch by making up the missed RMDs, and can even file a 5329 to request waiver of any penalty since most all IRA agreements specify life expectancy as the default RMD method. What makes this situation more complex than the RMD method is whether the distributions checks that continued after father’s death can count toward the son’s beneficiary RMD, reducing or eliminating any shortfall.
  • What was done with these checks, and was the son also the beneficiary of father’s will?  Automatic distributions after death are usually limited to one or two, but 3 years?


Add new comment

Log in or register to post comments