An estate can become the beneficiary of a person’s IRA in a couple of ways. First, the estate could be named outright as the beneficiary on the beneficiary form. This is not recommended. Why? One reason is that a non-designated beneficiary (like an estate), must follow certain restrictive payout rules.
The Investment Company Institute (ICI) is an association representing mutual fund companies and similar investment companies. Each year, ICI conducts a survey of the prevalence of IRAs in American households.
Question:
I have a client who just retired at age 80. He has $800,000 in his 401(k) plan which is being rolled over to an IRA. Does he have to take an RMD this year based on the December 31, 2022 401(k) account value, and can he defer that to early 2024?
Thank you!
Did you inherit an IRA from someone who is NOT your spouse? This is not uncommon. Maybe you inherited from a sibling or a parent or a friend. If this is your situation, proceed with caution! For nonspouse beneficiaries, a wrong move can result in disastrous consequences. So, take your time and do it right.
My biggest gripe with legislation is the same complaint held by most – the bulk of it is written in legalese – i.e., difficult-to-understand language. I am no idiot, but sometimes I sure feel dumb when I read things like the SECURE Act.
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.
By Ian Berger, JDIRA AnalystFollow Us on X: @theslottreport Earlier in my career, I worked for a company that sponsored a...
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.
Question:
Good afternoon. I am looking for some Net Unrealized Appreciation (NUA) help, please.
If someone does a rollover of company stock to an IRA, can she undo that rollover and then do an NUA transaction?
Thanks,
Alan
By Andy Ives, CFP®, AIF®IRA AnalystFollow Us on X: @theslottreport The Ed Slott team answers thousands of IRA and work plan questions...
