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RMDs after death - IRS guidance?


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Did I miss any IRA guidance on exactly how beneficiaries must take distributions over 10 years? They initially said, or at least everyone thought, that any time was ok - all in the tenth year if that is what was desired. Then last year they said no, it had to be taken each year, but 2021 and 2022 were ok if RMDs weren't taken. But they didn't say if 2021 and 2022 had to be taken in 2023, or if it would be ok to do it ratably over the remaining years - seems kind of important to be left hanging this long.

Ed Snyder

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41 minutes ago, Bird said:

Did I miss any IRA guidance on exactly how beneficiaries must take distributions over 10 years? They initially said, or at least everyone thought, that any time was ok - all in the tenth year if that is what was desired. Then last year they said no, it had to be taken each year, but 2021 and 2022 were ok if RMDs weren't taken. But they didn't say if 2021 and 2022 had to be taken in 2023, or if it would be ok to do it ratably over the remaining years - seems kind of important to be left hanging this long.

Just recently (within the last six months or so - I believe), the IRS indicated that if the deceased was in RMD pay status, those must continue throughout the 10 year period for the bene - otherwise, it is what you said - as long as the total is out by the end of hte 10 year period, you are good.

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I guess I didn't read that guidance closely enough - I thought it just said "no problem" for 2021 and 2022 but didn't specify how to take it. So, just to make sure I get it, if an account owner died in 2020 with a life expectancy of 20 years, then the RMD for 2021 would be 1/19, for 2022 1/18 (but they were "waived" for lack of a better word), etc. etc. but all had to be taken within 10 years, so the final year would likely be much larger.

Ed Snyder

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Assuming beneficiary is an individual or trust for that individual alone...

First question: Is beneficiary decedent's spouse? If so, he may title inherited IRA in his name and RMDs would be determined according. 10 year rule does not apply.

Next question: Is beneficiary a minor child, disabled or less than 10 years younger than decedent? If so, special rules apply (e.g. 10 year clock does not start for minor until she reaches age 21).

Next question: Did decedent die before or after her Required Beginning Date (RBD)? If before and 10 year rule applies no intermediate RMDs are required. If after, RMDs required during the 10 year period determined using IRS Single Life Expectancy Table based on longer of decedent's or beneficiary's life expectancy.

At this time it does not appear that waived RMD in respect of 2021 and 2022 for an inherited IRA subject to the 10 year rule have to be "made up." My understanding is that in 2023 the RMD is calculated as if any prior RMDs had been paid, i.e. if decedent dies after RBD in 2020, the 2023 RMD would be calculated as being the 3rd year of RMD payments.

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21 hours ago, FPGuy said:

If after, RMDs required during the 10 year period determined using IRS Single Life Expectancy Table based on longer of decedent's or beneficiary's life expectancy.

It's this, for a non-spouse, non-minor non-disabled. For some reason I didn't pick up that the idea was the RMDs would continue at the same rate for the remainder of the 10 years (2021 and 2022 essentially being waived), with the balance due in year 10. So I agree with your last paragraph.

Ed Snyder

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