Greg Ostrowski, CFP®, CRPC®, BFA™’s Post

Holy moly - the IRS has extended inherited IRA RMD relief through 2024. Guess we aren’t likely seeing Final Regulations on the SECURE Act soon… Looking forward to another year of not knowing whether many inherited IRA recipients will ultimately be subject to RMDs. But at least this time they gave the relief early in the year. The Proposed Regulations were issued over 2 years ago with the shocking 🤯 news that the IRS interpreted there to be RMDs for some inheritors under the new SECURE Act 10 year rule. There has been strong pushback and the IRS has been kicking the can down the road on finalizing the regulations. Few important points - 💡This isn’t relief for RMDs on ALL inherited IRAs - only those “designated beneficiaries” subject to the 10 year rule. 💡For tax efficiency purposes, most inheritos are going to want to take RMDs (or more) anyway or risk a big bill in year 10. 💡If the decedent died before RMD age or the inherited account was a Roth, the interpretation is there are no RMDs regardless if the Proposed Regulations are finalized.

ICYMI: The IRS cleared up Inherited IRA distribution rules, mostly. Essentially, the eligible designated beneficiary rules remain the same: they are exempt from the 10-year rule. For all others it depends on if the decedent passed before or after his/her RMD beginning date. If before, the beneficiary does not have to take annual distributions but still has to empty the IRA by year 10. If after, then the beneficiary is required to take annual distributions over 10 years based on his/her life expectancy factor year 1 through 9 and then emptying the remainder in year 10. The article below does a good job of explaining it, with links to IRS guidance.

A GREAT article by Morningstar that discusses the new IRS rules surrounding IRA's and RMD's. Here are some key takeaways: 📰 Annual RMDs Waived Until 2025: Beneficiaries inheriting after 2019 can skip annual RMDs for 2021-2024. This applies to non-eligible designated beneficiaries (NEDBs) of owners who died after the required beginning date (RBD). Tax Planning Implications: While skipping RMDs might seem beneficial, it could potentially result in a larger tax burden when the 10-year period ends. Advisors should consider having clients take voluntary withdrawals while tax rates are low, as they are expected to rise in 2026. 💸 Eligible Designated Beneficiaries (EDBs): EDBs, including surviving spouses and disabled individuals, are not subject to the 10-year rule and must continue taking RMDs as usual. ❌ Roth IRAs: Inherited Roth IRAs are exempt from the 10-year rule RMDs for the first nine years since Roth IRAs have no lifetime RMDs. Again -- if you have any further questions on these new rules or just need some clarity, please don't hesitate to reach out. Always happy to help! #FinancialAdvisor

Do you have an IRA that you inherited 2020 or later ("post-SECURE") and are wondering whether you need to take an RMD this year? The rule for most of you is that the account has to be distributed fully in 10 years. But, there has been confusion caused by the IRS as to whether you ALSO need to make annual distributions prior to the end of the 10-year period. Initially, they said that you did, if the original account owner was past their "required beginning date" (or RBD). Then, they essentially punted this down the road and waived the requirement for 2021 and 2022, and then again for 2023 in the middle of the year. Once again, earlier this week, they have kicked the can down the road for 2024 per IRS notice 2024-35. So, if this situation applies to you, no- you do NOT need to take an RMD this year. Doesn't mean you should not though. Confused yet? Our tax dollars, hard at work.

If you inherited an IRA account from someone who isn't your spouse, updated guidelines from the IRS reveal when taxpayers need to take annual RMDs for the 10-year rule. Learn what your next steps are as an inheritor.

If you inherited an IRA account from someone who isn't your spouse, updated guidelines from the IRS reveal when taxpayers need to take annual RMDs for the 10-year rule. Learn what your next steps are as an inheritor.

If you inherited an IRA account from someone who isn't your spouse, updated guidelines from the IRS reveal when taxpayers need to take annual RMDs for the 10-year rule. Learn what your next steps are as an inheritor.

If you inherited an IRA account from someone who isn't your spouse, updated guidelines from the IRS reveal when taxpayers need to take annual RMDs for the 10-year rule. Learn what your next steps are as an inheritor.

If you inherited an IRA account from someone who isn't your spouse, updated guidelines from the IRS reveal when taxpayers need to take annual RMDs for the 10-year rule. Learn what your next steps are as an inheritor.

If you've inherited a Traditional IRA or 401(k), missing a key RMD deadline could trigger costly IRS penalties. Learn the crucial steps you need to take to avoid this mistake and ensure compliance in my article below: https://lnkd.in/eKD7B_Xp