04.18.24
Heirs Get More Time To Keep Their Money in Inherited Retirement Accounts
by: Ashlea Ebeling
The Internal Revenue Service (IRS) said it would not impose penalties this year for missing required minimum distributions (RMDs) on inheritors of individual retirement accounts (IRAs) until details could be finalized. The rules required, among other things, that inheritors other than spouses empty IRAs within 10 years. Some heirs interpreted this to mean that they could hold off pulling money out until the final year, allowing them to time their withdrawals to lower their taxes while the balances continued to grow. Then, in February 2022, the IRS proposed rules mandating annual withdrawals for these inheritors during that 10-year period, if the original account owner had already been taking distributions. After complaints from taxpayers and financial services companies over how to follow the new rules, the IRS has extended the reprieve through 2024.
Read the full article on The Wall Street Journal