IRS Reverses Application of New 10-Year Stretch IRA Rules

[dascpa]

Apparently it's being poured over now by the "experts" but the IRS has apparently reversed its position on the 10 year IRA distribution change.  Now RMD's must be taken each year and the total by year 10.  This could cause big problems for 2020 and 2021 for those who did not take any distributions.  Just adding more crap to the other crap we deal with.

[Just-Lisa-Now-]

They need to knock it TF off with all these changes later down the line!

[Camp1040]

For all IRA's or just inherited?

[dascpa]

This would only apply to the new law that reduced the stretch IRA for non-spousal inherited IRA's.  I'm sure more info will be forthcoming from the experts and also how to deal with 2020 and 2021.

[qbteachmt]

This happened back in early 2021 and got resolved as erroneously stated. Is there something going on now? It was the SECURE Act that made the change. The current Pub 590-B states: "The beneficiary is allowed, but not required, to take distributions prior to that date"

[dascpa]

Yes, that's what's happening now but the info is not fully out,.  This came from one of the national tax firms in a posting today.

[TaxGuyBill]

I haven't heard of this.  Do you have any links for what you are talking about?

[rbynaker]

I just googled David's title and came up with this:

https://www.forbes.com/sites/ashleaebeling/2022/03/04/irs-nixes-10-year-stretch-for-most-inherited-i...

I haven't done a deep dive into this, just pointing you (us) in the right direction.

[TaxGuyBill]

Thanks Rick.

[sjrcpa]

I found that, too. I have not looked at the Proposed Reg yet.

I had a client ask me about RMDs from 3 different inherited IRAs yesterday. One inherited in 2020, the others in earlier years. She  didn't take her 2021 RMDs bc she thought they were waived like they were for 2020. Sigh.

And if anyone else didn't know yet - there are new life expectancy tables for computing 2022 and later RMDs.

[qbteachmt]

"there are new life expectancy tables for computing 2022 and later RMDs."

That came along with the change to 72 vs 70 1/2.