Question:
Has the IRS clarified the 10-year rule on inherited IRAs? Do you have to take RMDs each year or can you wait until the 10th year? Also, does this rule apply to inherited Roth IRAs?
Thanks,
Daniel
Question:
I have a client, age 65, who passed away and left her IRA to her estate. Two nephews and a niece are beneficiaries of the estate. Is there a way to add beneficiaries after her passing?
I spoke with a financial company, and they said you need some type of court order or ruling to allow this.
Question:
Ed,
My client recently passed away at the age of 86 and the beneficiaries were his twin grandchildren who are six years old. Does their 10-year clock to withdraw the funds start right away, or can they wait until they are 18 years old to start their 10-year clock to withdraw the funds?
Question:
Ed,
I recently saw an email from you on QCDs when deductible IRA contributions are made in the same year. It discussed how these two transactions interact with each other.
I am also wondering if the offset to the QCD would also occur for a SEP IRA or SIMPLE IRA contribution?
Thank you for your help.
A client of mine born in 1952 passed away in March 2021 and the IRA passed to her mother who is 91 years old. So, the 10 year rule applies to liquidate the IRA as she is not an eligible designated beneficiary (EDB). If the mother passes away at age 95 and leaves the inherited IRA to her son – how long does the son have to liquidate the account???
All the best
On April 14, we reported that the IRS was apparently interpreting the SECURE Act's 10-year payout rule in a surprising way – to require annual required minimum distributions (RMDs). Now, the IRS has made it clear (without actually saying so) that its prior interpretation was a mistake.
The SECURE Act changed the payout rules for most non-spouse beneficiaries of IRA owners who die after 2019. Those beneficiaries can no longer use the stretch IRA. Instead, they are subject to a 10-year payout rule, which requires the entire IRA to be paid out within 10 years of the owner’s death.
With the passage of the SECURE Act, once common IRA beneficiary planning strategies have been upended. For example, no longer can just anyone stretch payments on an inherited IRA. You must qualify as an “eligible designated beneficiary” (EDB) to stretch using your single life expectancy.
Just a few weeks after the start of the baseball season, the IRS has thrown us a curveball by apparently interpreting the SECURE Act 10-year payout rule in a totally-unexpected way.
We say “apparently” because the IRS explanation isn’t very clear. And even if it was clear, the IRS offered the information in an informal publication that should not be relied on.
Here’s the backstory: One of the major changes made by the 2019 SECURE Act was the elimination of the stretch for many beneficiaries of inherited IRAs.
Question:
Can a retired person not working contribute to a Roth IRA?
Answer:
There are no age limits for Roth IRA contributions. This allows older people to contribute. However, the rules do require earned income. For example, income from a part time job would work.
Question:
Hi there!
I have a quick question, so I thought I’d reach out to you to get your take on this. This year, IRA RMD’s have been waived, even for inherited IRA’s. That said, if a non-spouse inherits an IRA this year – and the new RMD rules dictate a 10-year withdrawal – but this year’s RMD is waived – does this year (2020) still count as year 1?
