Submitted By: someone
Answered: December 22, 2021 12:02 am

Does a beneficiary who inherits an IRA from the owner who died in 2021 need to take required minimum distributions?

Under a new 10-year rule applicable to beneficiaries who inherit IRAs from someone dying after 2019, the account must be distributed in full by the end of the 10th year after the year of the owner’s death, unless the beneficiary is an “eligible designated beneficiary,” such as the owner’ spouse or minor child, or is an individual not more than 10 years younger than the owner. If the 10-year rule applies, no distributions are required before the 10th year; you may withdraw as much or as little as you like in years one through nine. The amount remaining in the IRA, if any, after December 31 of the year containing the 10th anniversary of the owner’s death is subject to a 50% penalty.

If you are an “eligible designated beneficiary,” the 10-year rule does not apply, and you generally must take required minimum distributions from the IRA starting in 2022 (year after year of owner’s death) based on your single life expectancy.

For more information about the 10-year rule and the rules for eligible designated beneficiaries, see IRS Publication 590-B.

Tax Glossary

Private letter ruling

A written determination issued to a taxpayer by the IRS that interprets and applies the tax laws to the taxpayer’s specific set of facts. A letter ruling advises the taxpayer regarding the tax treatment that can be expected from the IRS in the circumstances specified by the ruling. It may not be used or cited as precedent by another taxpayer.

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