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Non-spouse beneficiary options. If the account holder's death occurred prior to the required beginning date (or if the account is a Roth IRA), the non-spouse beneficiary's options are: Take distributions based on their own life expectancy, beginning the end of the year following the year of death, or; Follow the 5-year rule
The SECURE Act changed rules for distributing assets from an inherited IRA for non-spouses. Many non-spouse beneficiaries who inherit IRA assets from account owners who passed away in 2020 or later will need to withdraw the full balance within 10 years.
Learn the required minimum distributions for your designated IRA beneficiaries.
Under the 10-year rule, the value of an IRA that has been inherited by a non-spouse beneficiary needs to be zero by Dec. 31 of the 10th anniversary year of the owner's death.
The rules for inheriting an IRA from a spouse or a parent, specifically, differ a bit from when you inherit the account from a different type of non-spouse. Here's what you should know for each situation.
In July 2024, the IRS released its long-awaited final regulations clarifying the annual RMD (required minimum distribution) rules for non-spouse beneficiaries of retirement accounts that are subject to the new 10-year rule. But like most IRS regulations, it’s anything but simple and straightforward.
Before converting, you might check your spouse's past tax returns to see if they included Form 8606, which is used to report nondeductible IRA contributions. Nondeductible contributions aren't taxable when you do a Roth conversion because taxes have already been paid on the money.