dmertz
Level 15

Retirement tax questions

Because your parent died in 2020, you inherited the account in 2020.

 

Due to the effects of COVID on the economy, RMDs for 2020 were waived.

 

You are subject to the 10-year rule, requiring that the IRA be completely drained by the end of 2030.

 

Because your parent died after their required beginning date for RMDs, you are also required to take annual RMDs based on your life expectancy.   However, due to conflicting information provided by the IRS prior to March 2022, the IRS has waived the penalty for failing to take beneficiary RMDs for 2021 and 2022 for those subject to the 10-year rule.  Your life-expectancy factor is from the Single Life Expectancy table based on your age in 2021, reduced by 1 for each subsequent year, so if you were age 58 on your birthday in 2021, your life-expectancy factor for 2021 was 28.9, so the factor for 2023 would be 26.9.  (If you were instead age 60 in 2021, your life-expectancy factor for 2021 was 27.1, making the factor for 2023 be 25.1.) 

 

The IRA custodian might be able to calculate your beneficiary RMD, but they are not required to do so even if you ask.