Inherited Inherited IRA

Mother passed away in 2016 and left an IRA to her son. He passed away in 2022 and the IRA beneficiary is his older sister.

What is the RMD schedule for the Sister? Is it the 10 years based on the Mother’s (original owner) death? Or based on the beneficiary’s death?

Financial Institution is saying that it needs to be liquidated which doesn’t make sense.

Thanks



If mother passed after her RBD, the successor beneficiary will have to continue the RMD schedule of her brother and also drain the inherited IRA by 2032. If mother passed prior to her RBD, the older sister must still drain the inherited IRA by 2032 but is not required to take annual RMDs before 2032. Financial institution may have their own rules, but more likely do not understand the proposed IRS Secure Act Regs.

Original IRA owner was 89 years old and died in 2016.  She left the IRA to her son who was 54 at that time.The son died in 2022 at age 60.  I do not think he had taken any distributions.  His beneficiary is his older sister – 65 years old.What is the distribution requirement for the older sister?   Thanks so much for your reply Alan!

Older sister is responsible only for completing son’s year of death RMD if he did not do so, not for prior years. If son would have been 55 in 2017, the 2022 divisor would have 26.6, and that divisor would be reduced by 1.0 each year thereafter, but the inherited IRA must also be drained by the end of 2032 under the 10 year rule. Older sister’s age is irrelevant. As a successor beneficiary she should maintain the RMD schedule that would have applied to the son had he lived.

Thanks so much!

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