Successor Beneficiary
I am looking for guidance with the following fact pattern:
- T-IRA owner died in 2022 before his RBD
- Mom is the 100% sole primary beneficiary – specifically she is an Eligible Designated Beneficiary (EDB) because she is not more than 10 years younger- As an EDB mom “stretched” distributions before her passing in 2023. She named her other son as beneficiary.
Questions:
What rule does the son (i.e. successor beneficiary) follow? I think the son is now subject to the 10-year rule with year 1 beginning in this year (2024) – confirmation needed. Assuming this is correct – does he take RMDs in years 1-9? If so, is it based on his single life expectancy or does he “step into the shoes of his mom” and use her remaining life expectancy
Permalink Submitted by Alan - IRA critic on Fri, 2024-06-21 16:30
Yes, the other son is subject to a new 10 year rule but must continue Mom’s RMD schedule including having completed Mom’s 2023 year of death RMD if she did not. That said, the 2024 beneficiary RMD for the successor beneficiary son was waived by Notice 2024-35 but beneficiary RMDs will have to be taken starting in 2024, the 2nd year of the 10 year rule. Son’s age is immaterial and cannot be used since he is a successor beneficiary.