Non-Eligible IRA Beneficiaries and the 10 Year Rule
Can you confirm that Non-Eligible IRA Beneficiaries that are subject to the 10 year rule (they inherit an IRA after the owner has reached their RBD) use the minus 1 method for years 2-9 when calculating their RMD.
For example:
Year 1: LE is based on the age of the beneficiary in year 1 of the 10 year clock (Year 1 = the year after the year of death of the IRA owner)
Year 2: LE = Year 1 LE – 1
Thank you in advance,
Permalink Submitted by Alan - IRA critic on Thu, 2024-02-15 15:46
Yes, that’s correct assuming this is the sole beneficiary, or this beneficiary created a separate inherited IRA no later than the end of Year 1. In this situation, the IRS has waived the beneficiary RMDs in 2021-2023 because the Secure Act Regs are still not final.
Permalink Submitted by Robert Wright on Thu, 2024-02-15 15:55
Thank you – as always.
Permalink Submitted by Robert Wright on Thu, 2024-02-15 18:41
So, if this is a sole beneficiary, what happens if the beneficiary does not create a separate inherited IRA no later than the end of Year 1?
Permalink Submitted by Alan - IRA critic on Thu, 2024-02-15 19:29
No problem if sole beneficiary, but if there is more than one beneficiary on an inherited IRA after the end of year 1 the age of the oldest of them must be used by all.
Permalink Submitted by Robert Wright on Thu, 2024-02-15 20:47
Thanks. Again.