Inherited IRA Before and After 2019 (Stretch/No Stretch)

Submitted by Scott Carbaugh on Wed, 2023-07-19 22:42

Adult child is the only named beneficiary in mother’s TIRA. Mother passes in 2019. Child opens inherited IRA and receives funds from mother’s IRA.

Father of same child passes in 2023. Again, child is sole beneficiary in father’s TIRA.

Can child place funds received from second IRA in same account that was established in 2019?

Yes/No? Why/Why not?

Thank you!!!

Permalink Submitted by Alan - IRA critic on Wed, 2023-07-19 23:36

No. IRAs inherited from different decedents cannot be combined and RMDs must be taken separately under the applicable rules. Each inherited IRA must contain the name of the decedent who passed and cannot include more than one. In this case there is another reason: The RMD calculations are totally different.
Mother passed pre Secure Act. The RMD divisors are determined based on the child’s age in 2020 even though all 2020 RMDs were waived. The divisors are reduced by 1.0 for each year, but for the 2022 and later RMDs the divisor must be reset to reflect the new RMD tables for 2022.
Father passed under the Secure Act and the child will fall under the 10 year rule unless he is disabled or chronically ill. The inherited IRA must be drained by the end of 2033. If father passed after his RBD annual RMDs will be required in years 1-9 of the 10 year period, but if father passed prior to RBD, there will be no annual RMDs required.
If either parent passed after RBD and did not complete their year of death RMD, the child is/was responsible for completing it.