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Non-Spouse Beneficiaries and Roth IRA Distributions: Today’s Slott Report Mailbag

QUESTION: On September 6th in a piece titled, “Rules for Inherited IRAs that May Surprise Nonspouse Beneficiaries,” Sarah Brenner from Ed Slott and Company wrote, “If you inherited the IRA funds in 2020 or later, as a nonspouse beneficiary you will most likely be subject to a 10-year payout-period, possibly with annual RMDs during the 10-year period.” My brothers and sisters and I are non-spousal beneficiaries, and my understanding is that there is no rule or code yet that states we must take some out of the inherited IRA account each year, only that it must be drained by end of the tenth year as required by the SECURE Act. My sibling says we must take some each year. Which of us is correct? We are all under the RMD age, in our sixties and our parents passed September of 2022.
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SECURE 2.0 Allows QCDs to CGAs

SECURE 2.0 expands qualified charitable distributions (QCDs) by allowing a one-time only QCD of up to $50,000 to a split-interest entity. As a result of this new rule, there is now a great opportunity to fund a charitable gift annuity (CGA) with a QCD.
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Beware of Investing IRAs in NFTs

If you are thinking of buying an NFT (non-fungible token) with your IRA funds, you may want to reconsider. In Notice 2023-27, the IRS said that NFTs associated with “collectibles” are prohibited IRA investments. This could expose you to significant taxes and penalties.
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October 16: Deadline for Correcting 2022 IRA Contributions

Maybe you made a Roth IRA contribution for 2022 and then discovered your income was too high. Maybe you contributed to a traditional IRA but later discovered that the contribution was not deductible. You may have made an IRA contribution and just changed your mind. You’d rather contribute to a Roth IRA or maybe not contribute at all. There is good news if you act quickly. You can fix these issues by correcting your 2022 IRA contribution by the upcoming October 16, 2023 deadline.
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“Mid-Air” Roth Conversions

If ever I was traveling from Los Angeles to Atlanta, I would choose a direct flight with no layovers. I want the most efficient route to my destination. Point A to Point B. Take off, land. Assuming no difference in ticket price and all things being equal, if another LAX to ATL itinerary included a stop in, say, Chicago, would there be any reason to take it? Why pass through another airport in another city when I can fly direct?
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More on the Roth Catch-Up Contributions Delay

The August 28, 2023 Slott Report summarized IRS Notice 2023-62, where the IRS delayed the effective date of the SECURE 2.0 rule requiring catch-up contributions by higher-paid older employees to be made on a Roth basis.
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