New IRS RMD regulations released 7/19/2024 regarding inherited IRAs

downeast
downeast Member Posts: 4 Newcomer
in Live Q/A Event

I read several articles regarding these changes, but I'm still confused as to what actually applies to Tax year 2024. The two changes I am specifically interested in are:

(1) Any beneficiary can satisfy a year-of-death RMD that was not yet taken by the deceased for the year they passed, as as opposed to a proportional share by each beneficiary.
(2) Beneficiaries no longer need to do the RMD by 12/31 in the year-of-death, and now have until 12/31 of the following year.

These are welcome rules, but I'm still confused as to which regulations apply to 2024 tax year. The new regulations apparently have an applicability date of January 1, 2025, but also include the following verbiage:

For earlier years, taxpayers must apply the preexisting final regulations, but taking into account a reasonable, good faith interpretation of the amendments made by sections 114 and 401 of the SECURE Act. Compliance with the proposed regulations will satisfy that requirement. For the 2023 and 2024 distribution calendar years, taxpayers must also take into account a reasonable, good faith interpretation of the amendments made by sections 107, 201, 202, 204, and 337of the SECURE 2.0 Act.

Any thoughts?

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Answers

  • CoryF
    CoryF FreeTaxUSA Agent Posts: 115

    Thank you for joining our community, Downeast.

    There are a lot of conflicting rules that are going to apply to inherited IRAs. Making sure you have the right information is important. However, taking distributions falls into an investment category that is out of our scope for support. I did find this IRS resource that may provide better information. If you are not getting the right financial advice from your financial institution with the inherited IRA, then you might want to contact a local CPA to get better advice regarding the timing and taxability of the required distributions.

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  • downeast
    downeast Member Posts: 4 Newcomer

    Thanks for your reply. The most confusing thing about this is the wording "reasonable, good faith interpretation of the amendments" and "Compliance with the proposed regulations will satisfy that requirement." I had reached out to my CPA and still waiting to hear back.

    In case any readers are also interested, this is where I read about the new rules:

    https://stwserve.com/new-irs-regulations-on-year-of-death-rmds/#:~:text=Every%20year%20thereafter%2C%20the%20RMD,Thrift%20Savings%20Plan%20(TSP)

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