RMD suspension for beneficiaries
Terry, Am I reading your stimulus article correctly. If I have an inherited IRA and took your required distribution for 2019, I do not have have to take an RMD this year based on the 2019 ending balance in the accounts even if I am under 70 1/2 years old?
Terry Says
Here’s what the Financial Planning association has to say about that. Let me know if you fit in this category, or if this advice does not apply to your situation, and I will seek further advice.
Beneficiaries subject to the 5-year rule
A less-obvious group that can benefit from this waiver are beneficiaries who inherited in 2015 or later and who are subject to the 5-year payout rule. Generally, this only applies to non-designated beneficiaries who inherited before the deceased IRA owner reached his required beginning date (April 1st following the age 70 ½ year).
These beneficiaries may have inherited through a will or were a beneficiary of a trust that did not qualify as a designated beneficiary. For example, for IRAs inherited in 2015, under the 5-year rule any balance remaining in the inherited IRA would normally have to be withdrawn as the RMD for 2020. Under the just-passed act, beneficiaries now have one more year, until Dec. 31, 2021, to empty the account. For beneficiaries who inherited from 2015 to 2020, the 5-year rule becomes a 6-year rule. Advisors should see if they have any clients in this situation and alert them to this development.
