Inherited IRA from 2018
Client inherits Traditional IRA from Mom in January of 2018. Mom dob was 12/1928. As far as the client knows he has not taken any distributions. What would his options have been and how to move forward? He was under the impression that he needs to have it withdrawn within 10 years. But obviously mom would have been taking RMD’s.
Permalink Submitted by Alan - IRA critic on Fri, 2022-09-09 17:23
The 10 year rule does not apply to deaths prior to 2020. Client should have been taking life expectancy RMDs for 2019 and 2021 using his single life expectancy, and also should have completed Mom’s 2018 RMD, which she probably did not complete, having passed in January of 2018. If these RMDs have not been completed, client needs to calculate them and request a distribution in the total amount before year end. He must also take his 2022 beneficiary RMD, the divisor for which must be reset due to new RMD tables effective in 2022. The total of these distributions will be taxable in 2022. After making up the late RMDs, he also needs to file Form 5329 for each year and request that the penalty be waived for reasonable cause. The Secure Act did not affect his situation.