Inh IRA
Client came to us earlier this year with fidelity inh IRA from his father who was already taking RMDs when he died in 2021.
Client has NOT taken any RMDS, it took several years to find all father and mother’s accounts. now they are consolidated.
I know with Covid and Inh IRAs, there were relaxed rules.
We are now meeting to address RMDS for his father’s account, approx 100k. How should we operate on past RMDS if any and when should the account be exhausted. I am assuming 2031. Client is retired , but wife is working so we could shelter some of the taxation through her 401k.
Permalink Submitted by Alan - IRA critic on Wed, 2024-10-16 10:29
First, it needs to be determined if father completed his 2021 year of death RMD before passing. If not, client is responsible for doing so and if late a 5329 for 2022 must be filed since the deadline to complete that RMD was in 2022.
As for client’s beneficiary RMDs, the IRS has waived them for 2021-2024 unless client is disabled and therefore not subject to the 10 year rule. Beneficiary RMDs must resume in 2025 with the divisor based on client’s age in 2022 and reduced by 3.0 for 2025. The inherited IRA must be drained by the end of 2031 per 10 year rule.
If client was not the sole beneficiary or if father’s IRA was itself inherited, different rules apply.