Does Distribution from Inherited IRA Count Towards RMD?

[DustyMom]

My mother passed away earlier this year. Her traditional IRA was combined into Dad's traditional IRA. I have no real questions on that part of things, but she also had a small inherited IRA from my grandmother (her mother) who passed away in 2021. Dad now has this inherited IRA in his account (all with Vanguard). Mom did not take her RMD for 2023, but the amount she should have taken is quite close to the total inherited IRA balance. My question is: if Dad closed out the entire inherited IRA before the end of this year, would that count toward the RMD that Mom should have taken or does it have to come from the now combined traditional IRA account?

 

[njhowie]

Inherited IRAs are handled completely separate from traditional, and RMDs must be taken from each individually as required.

On the day mom passed away, her obligation to take RMD from the inherited IRA ended...however, whoever inherits that inherited IRA will need to take a RMD from it in 2023 for themself. If it goes to Dad and he decides to simply close it and pay taxes, that will certainly satisfy the RMD requirement for 2023 as well as any further obligation - for him.

 

[Blue Poles]

The IRS is still trying to finalize the RMD rules for inherited IRAs. No RMDs are required for 2023. Actually, they are waiving the penalties for not taking the RMD, which is practically the same thing.


"On July 14th, the IRS released Notice 2022-54, waiving penalties for certain inherited retirement account beneficiaries for missed required minimum distributions in 2023 that would have been necessary under the 2022 proposed guidance."

https://www.forbes.com/sites/kristi...et-more-rmd-relief---for-now/?sh=3b7a96be3266