Non-Spouse Inherited IRA Prior to SECURE ACT

[archie75]

My father (66M) inherited a traditional IRA from his mother (88F in 2018) who passed away in February 2018.

Because he inherited this IRA prior to the SECURE ACT being passed in 2020, is he required to follow the 5 year rule and withdraw all funds from the account prior to December 31st, 2023?

[Alan S.]

My father (66M) inherited a traditional IRA from his mother (88F in 2018) who passed away in February 2018.

Because he inherited this IRA prior to the SECURE ACT being passed in 2020, is he required to follow the 5 year rule and withdraw all funds from the account prior to December 31st, 2023?

No. IRAs inherited prior to 2020 are not affected by the Secure Act until the beneficiary passes. Father should continue to take annual beneficiary RMDs. The 5 year rule never applies when the IRA owner passes after their RBD, and was optional if owner passed prior to RBD. I will assume that father was named directly as beneficiary rather than inheriting the IRA through the estate.

If father has fallen short of the beneficiary RMDs he can make up the difference and request a penalty waiver using Form 5329.

His mother passed early in the year and if she had not completed her 2018 RMD before passing, then father was responsible for completing it by 12/31/2018.

[rossington]

My father (66M) inherited a traditional IRA from his mother (88F in 2018) who passed away in February 2018.

Because he inherited this IRA prior to the SECURE ACT being passed in 2020, is he required to follow the 5 year rule and withdraw all funds from the account prior to December 31st, 2023?

No, he inherited a Stretch IRA.

[archie75]

My father (66M) inherited a traditional IRA from his mother (88F in 2018) who passed away in February 2018.

Because he inherited this IRA prior to the SECURE ACT being passed in 2020, is he required to follow the 5 year rule and withdraw all funds from the account prior to December 31st, 2023?

No. IRAs inherited prior to 2020 are not affected by the Secure Act until the beneficiary passes. Father should continue to take annual beneficiary RMDs. The 5 year rule never applies when the IRA owner passes after their RBD, and was optional if owner passed prior to RBD. I will assume that father was named directly as beneficiary rather than inheriting the IRA through the estate.

If father has fallen short of the beneficiary RMDs he can make up the difference and request a penalty waiver using Form 5329.

His mother passed early in the year and if she had not completed her 2018 RMD before passing, then father was responsible for completing it by 12/31/2018.

Thank you!