In 2014, my siblings and I inherited equal portions of our father's IRA. Since he was over 72 at death, we have been taking the required RMDs.
One of my siblings recently passed, and their spouse inherited his portion of the IRA. Their money man told them that under the new rules, they must withdraw the entire amount within two years. That sounds odd to me, but I know there are new rules. I've searched the IRS web site for clarification, but haven't found anything covering this particular situation. Neither my sibling nor their spouse was 73 at death, though sibling was just over 70-1/2.
Can someone clarify this for me?
Question regarding inheriting an already-inherited IRA
byu/BreakfastInBedlam intax
Posted by BreakfastInBedlam
3 Comments
Commenting to see replies, but that sounds right, bc it’s going off of the original owners death age. Being that he died b4 2020 different rules apply. I believe the ideology behind this is the government wants its tax money it should have received from the RMDs the original owner should have taken.
I would expect that either:
1. surviving spouse could treat the inherited IRA as his own (no RMD if he’s under 73)
2. Inherited IRA to him starts a 10 year clock for distributing the whole account
3. Inherited IRA to him continues the distribution schedule as your sister was doing, and this is likely where the 2 years comes from
I’ll be following this post to see what others think!
I think #2 sounds most correct to me.
I believe the person should have 10 years.
https://thelink.ascensus.com/articles/2025/6/24/successor-beneficiaries-what-are-their-distribution-options
Does the new inherited IRA need to be distributed 10 years after the IRA owner’s death or the original beneficiary’s death?
If the original beneficiary was a designated beneficiary, the account must be distributed by December 31 of the year containing the 10th anniversary of the IRA owner’s death.
If the original beneficiary was an eligible designated beneficiary (including *any* individual who inherited an IRA before 2020), the account must be distributed by December 31 of the year containing the 10th anniversary of the original **beneficiary’s** death, unless the original beneficiary was a spouse or minor child. See charts above for options for original spouse beneficiaries and a minor child of the IRA owner.
If “recently” means this year, Money Man telling them they have to depete the account within 2 years, I can’t see how they’re getting that as the deadline under any of the variations that have been implemented since 2020. If he’s saying that, he should tell you why in a way that matches the types of explanations on that web page I listed.