Inherited IRA Question

Submitted by Matt Mason on Fri, 2022-10-21 17:08

Non-married Client age 70, passed away in 2022 before RBD.

IRA Beneficiaries are two daughters, age 40.

Designated beneficiaries, not an “EBD” for any exception purposes

Confirming: They now use the 10-year distribution rule, to empty IRA account. Since the mother passed away before RBD they do not have “RMD” limitations during the 10 years.
*With that said, the currently have lower incomes and plan to take distributions to fill out the smaller tax brackets as they go.

Thanks
Matt



Submitted by Alan - IRA critic on Fri, 2022-10-21 17:38

Yes, you are entirely correct.

Submitted by John McGlothlin on Sat, 2023-06-24 14:47

So just to confirm: for non-eligible designated benes subject to the 10-year rule where the account owner died before RBD, no RMDs apply. For 10-year rule benes where account owner died after RBD, RMDs do apply. Correct?

Submitted by Alan - IRA critic on Sat, 2023-06-24 15:15

Yes, that is the case outlined in the IRS proposed Secure Act Regs. There appears to be little chance that the IRS changes their mind again. These Regs need to be finalized in the next 3 months or more issues will be created.

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