Pre-Secure Act Question
Hello,
I have a client that inherited her father’s IRA in 2017. Father was of RMD age and satisfied it in 2017. IRA BDA owner starts taking RMD in 2018 at 76 (14.1 LE Factor) and this reduces by one every year after. She passed away in 2023 and her daughter inherited the IRA BDA. What schedule does her daughter need to follow for taking RMD’s? Continue using her Mother’s Life Expectancy or would the daughter follow the 10 year rule that would start in 2024?
Thank you.
Permalink Submitted by Alan - IRA critic on Tue, 2024-10-01 13:26
Both. Daughter must continue client’s RMD schedule, which will drain the inherited IRA in 7 or 8 years. While the 10 year rule also applies to daughter, it’s moot since the inherited IRA will be drained prior to the 10 year deadline in 2033.
But there is an exception for 2024 due to the IRS waiver of certain beneficiary RMDs (including certain successor beneficiary RMDs) due to delay in releasing the final Secure Act Regs, just released in July. Therefore, the 2024 successor beneficiary RMD is waived but the annual RMDs must resume in 2025.
Daughter was also responsible for completing the 2023 beneficiary RMD of mother, if mother did not complete it before passing. The new deadline for that is 12/31/2024, if applicable.