Inherited IRA distribution question.

Forum|Forum|4 years ago
December 16, 2021
1 reply
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My father passed away in September of 2020. All of his accounts were TOD and split between me and my 2 siblings. One of the accounts was an IRA. When he died, his IRA account was converted into 3 separate IRA-BDA accounts.

I've talked to Fidelity twice and they have told me that we're subject to the 10 year rule, so I thought this issue was settled long ago. My brother said they told him that we have to take out a required minimum distribution of 10% every year or face a penalty.

Who's correct here? I'm 49 and my brothers are 55 and 60. So I guess my question is what determines if we are required to take RMDs or the 10 year rule applies?

B

Bsch4477

Employee

If you take 10% a year according to the 10 year rule you will have taken it all in 10 years. If you consider the 10% yearly withdrawal a RMD and take it for 10 years you will have taken it all in 10 years also.

B

badger6Author

Employee

Yes, I understand the math. However, the 10 year rule doesn't require yearly RMDs. You can take it out as you see fit, just as long as the account is liquidated at the end of the 10 year period. I'm trying to figure out if I'm required to take RMDs every year.

Critter-3

The 10 year rule simply states the entire IRA must be distributed in 10 years ... how you do it is totally up to you. There are no RMDs unless you are 72 or older.