The rules governing inherited IRAs have changed significantly in the last five years, adding complexity to the planning process and creating uncertainty regarding how some of the new rules should be applied. Thankfully, with the recent release of final regulations, the IRS has put to rest much of the uncertainty by clarifying many of the previously unanswered questions regarding these new rules. To help navigate these changes, we have prepared a flowchart to clarify the process for handling distributions from inherited traditional IRAs. This flowchart outlines important factors, including:
- Whether you are classified as an Eligible or Non-Eligible Designated Beneficiary, and how that will impact on your distribution requirements.
- How distribution requirements vary based on the timing of the original account owner’s death.
- The scope of the 10-year Rule and its applicability to beneficiaries.
- The requirements for Required Minimum Distributions (RMD) and the relevant life expectancy considerations.
How Must I Take Distributions From the Traditional IRA I Inherited?
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