Inherited IRA 10 Year Rule

[@ACapReCap]

ACap will not respond to comments seeking tax or financial advice. Please consult a CPA or CFP who is familiar with your individual circumstances.

[@jlee8821]

Thank you for the information.

[@SteveV1960]

I was just informed a few days ago that the IRS is now saying you have to take a required minimum distribution in each of the first 9 years . This is really messed up . No one seems to know what's going on.

[@raymondcaylor6292]

You're right they don't. I have one inherited IRA that has a $ amount in Required Minimum Distribution section of statement and another company that shows nothing. Both companies agree that if the person you inherited from hasn't taken their required RMD for the year that they died you must take it and of course the 10 year deadline to dissolve. My CPA told me she's following the Institutions statement until there's definitive explanation from IRS on years 2-9. Both of mine are non-spouse and the one showing a $ amount under required distribution was inherited in 2020 and the RMD had been satisfied for the year. I took no distributions in 2020 or 2021 but did this year. It makes it a little hard to plan but I can take total distributions of 80K before it pushes me up in bracket so trying to stay at no more than 60K .

[@bmp713]

@@raymondcaylor6292 Do you or anyone know if an inherited ROTH IRA from a parent requires an RMD? There is so much conflicting information out there. Thank you

[@raymondcaylor6292]

@@bmp713 I do not for certain know. My CPA is acting on the side of caution and recommending to her clients yes. Last year if you choose not to with her she requires you sign a disclaimer stating she couldn't get a clear answer herself from the IRS. Again this is last year advice from her. If you inherited it in 2020 your 10 year window to empty without penalty was 12/31/2030 and you didn't have to worry about RMD for 2020. ANY other Inherited IRA's she recommended and in fact did take the minimum but showed you what tax implications if you took the amount equal to equal amount of time left to deplete (25K left in account and your had 5 years left to deplete she showed tax on $750 and $5K) the account. I don't see her again until the end of March as I'm low priority because I always have to pay a little. She give me my new Quarterly Estimated Tax number too. I get the pleasure of paying twice every April. Side Note: I believe Fidelity is also showing RMD's as due on Accounts that previously didn't have a requirement so I surmise they also are siding with abundance of caution. Fidelity shows an RMD requirement on a 2015 inherited IRA that hasn't shown one and this 2020 one that started me down this rabbit hole. Can you imagine the IRS being more mucked up than not having a clear and written ruling on minimum distributions, individual state rebates, or state stimulus payments. Good Luck but avoid penalties and interest whenever you can because these fine folks left it to us as a blessing and we shouldn't waste a penny of their hard work and sacrifice.

[@Bondbeer]

If the parent was at the age where they were already taking RMDs, there are proposed regulations that say RMDs are required in years 1 to 9. However the penalty was forgiven for 2021,2022, and 2023 due to confusion and the regs are still not finalized. If you have a tax advisor they should be able to tell you if they get finalized in 2024 or deferred again. Or just Google it later in the year if you don’t have a tax advisor