Inherited IRA
I have an inherited IRA. My mother passed away in June of 2023. We did take out an RMD in 2023 and settled that. But by the time the estate was settled, I didn't inherit the money until January of 2024. We haven't taken the distribution yet for 2024, we thought we had until 2025.
Is there a grace period? Or are we correct and could wait until 2025? We haven't filed our 2024 taxes yet.
Answers
-
Hi JPF20_3k,
It sounds like you may be subject to the 10-year rule. If a beneficiary is subject to the 10-year rule,
- Empty the entire account by the end of the 10th year following the year of the account owner's (or eligible designated beneficiary's) death
- Relief under Notice 2022-53 for beneficiaries subject to the 10-year rule
- The IRS will not treat a beneficiary of an inherited account in a plan or IRA who was subject to the 10-year rule and who failed to take an RMD for 2021 and 2022 as having failed to take the correct RMD
- The IRS then expanded this notice to cover calendar years 2023 and 2024.
You are correct that penalties for failing to take an RMD in this case do not begin until this year, 2025, meaning you would be able to begin taking the RMD this year and won't be penalized for not taking an RMD in 2024.
You can find additional information at:
