Question

RMD on beneficiary IRA

Forum|Forum|1 year ago
March 20, 2025
1 reply
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I inherited an IRA 2-3 years ago. The rule then was that I must take it out within 10 years, but I could wait even until year 10 to do so, and take zero for the first 9 years. I am told that the rule changed. Does it affect an existing, aged, beneficiary IRA (as mine), and if so, what new rule must I follow? Thank you.

O

Opus 17

Starting with 2025, if the original owner was older than their RMD beginning year, the beneficiary must also take an RMD. The RMD is calculated using the single life expectancy table in publication 590-B, starting from the year they died, and reduced by 1 year for every year after.

For example, if the original owner died in 2023, and you were 60 years old at the time, your single life expectancy was 27.1 years. That means that your RMD for 2025 is the ending balance on 12/31/2024 divided by 25.5 (27.1 minus 2 years since 2023). Your RMD for 2026 will be the ending balance on 12/31/2025 divided by 24.5, and so on.

This rule applies to all IRAs inherited after 2019. The SECURE act called for RMDs starting from 2020 or 2021, but it took the IRS a long time to officially adopt the regulations, so they will waive any penalties for missing the RMDs from 2020-2024, but they start in 2025.