Client’s mother passed away leaving a NQ annuity worth 780k with 238k cost basis. Mother passed away on 3/9/23.

They don’t need income; they also are both working and don’t want to pay any more taxes than have to be paid, but also don’t want to be left with a time bomb in 5yrs.

1, If she takes a 5yr deferral with a fixed rate of interest on a 5yr annuity with an inception date of 6/15/23, she will go past the 5yr passing of her mother on 3/9/28. Does the IRS give any leeway on going past the 5yr anniversary date of death by 3 months?

2. If she takes a NQ stretch:
– how do you figure out what her payment would be per year to satisfy the IRS on 780k?
– how long can she stretch out the contract?
– Can the beny stretch any longer after she passes?

3. Does she have any other option other than the 5yr deferral or the stretch?

Thank you very much
Douglas