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Post-RBD Distributions under SECURE ACT Provisions


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Question #1 - Under the provisions and requirements enacted by the Secure Act for 2020 and beyond, if an IRA owner dies in 2020 or after, and was past their RBD at the time of their death, must a designated beneficiary (who does not qualify as an eligible designated beneficiary) continue to take an annual RMD beginning by 12/31 of the year following the death of the owner, but then also deplete the account by the end of the 10th year after the death of the owner?  Internal discussions in my workplace differ, some saying the RMDs are suspended at the owners death, and that the beneficiary can let the balance sit untouched for the 10 year period. Others, believe RMDs must continue but account must be depleted at 10 years.

Question #2 - If an eligible designated beneficiary or designated beneficiary (if the answer to #1 above is yes)  fails to take a RMD, by the required date after the owner's death, is it merely a failed RMD subject to the 50% excise tax/penalty for the shortfall, or do their payout options default to something else, like the 10 year rule? 

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I’ll take a stab at this. They didn’t repeal the rule on death after the RBD - they just added a new condition that it be paid out within 10 years. So it looks to me like the RMD is still due by 12/31 and if not paid, then it’s subject to the excise tax. I don’t think it reverts to something else. 

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