Inherited & Twice Inherited IRAs (Do I have it right?)

[alpenglow]

I've been reading through threads and linked articles explaining Secure 2.0 distributions from Inherited IRAs.

Here are the details that I'd like to confirm.

"Bob" passed in Nov 2023 at the age of 77 and his triplet sister "Suzie" inherited his Traditional IRA. Since Suzie is younger by an hour or so, she is an "Eligible Designated Beneficiary" and can stretch distributions. Suzie will use the single life expectancy table (table I) in IRA pub 590B to calculate RMDs. For example, this year she is 78 and will use 1/12.6 to calculate the RMD.

"Bob" had an inherited IRA from the other triplet brother "Bill". Suzie inherited this IRA making it doubly inherited. I believe EDB status doesn't exist here, so this IRA is subject to the ten year rule. This IRA must be depleted by 2033.

The IRS is waiving RMDs and penalties this year, so Suzie doesn't have to take the RMDs this year. This may or may not be a good idea. Either way, the double inherited IRA would need to be completely depleted by 2033.

Do I have this right?

[arcticpineapplecorp.]

I've been reading through threads and linked articles explaining Secure 2.0 distributions from Inherited IRAs.

Here are the details that I'd like to confirm.

"Bob" passed in Nov 2023 at the age of 77 and his triplet sister "Suzie" inherited his Traditional IRA. Since Suzie is younger by an hour or so, she is an "Eligible Designated Beneficiary" and can stretch distributions. Suzie will use the single life expectancy table (table I) in IRA pub 590B to calculate RMDs. For example, this year she is 78 and will use 1/12.6 to calculate the RMD.

"Bob" had an inherited IRA from the other triplet brother "Bill". Suzie inherited this IRA making it doubly inherited. I believe EDB status doesn't exist here, so this IRA is subject to the ten year rule. This IRA must be depleted by 2033.

The IRS is waiving RMDs and penalties this year, so Suzie doesn't have to take the RMDs this year. This may or may not be a good idea. Either way, the double inherited IRA would need to be completely depleted by 2033.

Do I have this right?

your first example is correct, though I didn't double check if 1/12.6 is correct to calculate the RMD

in the second example,

Example: George died in 2020 at age 74. George’s brother, Jeb, age 65 is named as the primary beneficiary of George’s IRA. Jeb is less than 10 years younger than George, so that Jeb is an eligible designated beneficiary. Therefore, Jeb can take annual RMDs using his own, single, life expectancy. Jeb names his niece, Jenna, as the successor beneficiary of the inherited IRA. Jeb dies in 2022. Jenna is subject to the 10-year distribution rule. Jenna must empty the inherited IRA by December 31, 2032. During the 10-year period, Jenna must take annual RMDs in years 1-9 based on Jeb’s single life expectancy.

source: https://greenleaftrust.com/missives/suc ... ficiaries/

[alpenglow]

Example: George died in 2020 at age 74. George’s brother, Jeb, age 65 is named as the primary beneficiary of George’s IRA. Jeb is less than 10 years younger than George, so that Jeb is an eligible designated beneficiary. Therefore, Jeb can take annual RMDs using his own, single, life expectancy. Jeb names his niece, Jenna, as the successor beneficiary of the inherited IRA. Jeb dies in 2022. Jenna is subject to the 10-year distribution rule. Jenna must empty the inherited IRA by December 31, 2032. During the 10-year period, Jenna must take annual RMDs in years 1-9 based on Jeb’s single life expectancy.

source: https://greenleaftrust.com/missives/suc ... ficiaries/

Hi arcticpineapplecorp - thanks for those clarifying details in red regarding how to calculate the 10-year RMDs.

[arcticpineapplecorp.]

Example: George died in 2020 at age 74. George’s brother, Jeb, age 65 is named as the primary beneficiary of George’s IRA. Jeb is less than 10 years younger than George, so that Jeb is an eligible designated beneficiary. Therefore, Jeb can take annual RMDs using his own, single, life expectancy. Jeb names his niece, Jenna, as the successor beneficiary of the inherited IRA. Jeb dies in 2022. Jenna is subject to the 10-year distribution rule. Jenna must empty the inherited IRA by December 31, 2032. During the 10-year period, Jenna must take annual RMDs in years 1-9 based on Jeb’s single life expectancy.

source: https://greenleaftrust.com/missives/suc ... ficiaries/

Hi arcticpineapplecorp - thanks for those clarifying details in red regarding how to calculate the 10-year RMDs.

yes, but only for the second one because she's a successor beneficiary on that one (the beneficiary (her) of a beneficiary (Bob's) of Bill's IRA). On the first one, she's merely the beneficiary of Bob's IRA.