Inherited IRA RMD

Forum|Forum|8 months ago
October 24, 2025
4 replies
20 views

I have a client that inherited an IRA. His brother passed away during 2023, however, everything was held up in probate until 2025. A RMD should have been made from this account by 12/31/24, however, my client just got access to the account. Is there any way around the penalty on the late distribution from the account?

Individual

Best answer by sjrcpa

Fill out the 5329 and request a waiver of the penalty.

sjrcpaAnswer

Level 15

Fill out the 5329 and request a waiver of the penalty.

The more I know the more I don’t know.

BobKamman

Level 15

If the brother was named as beneficiary, the IRA would not go through probate (although state law might have delayed its distribution if there were claims by creditors or a spouse). Are you sure that there is a penalty for 2024? IRS waived that for a lot of people who wanted to follow the earlier version of the 10-year rule (nothing required annually, all could be taken in 10th year).

D

d371Author

Level 2

Based on the information that I have received the brother had 2 options, Life expectancy Payments or the 10 year rule. His deadline for making this election was December 31, 2024 so since no election was made it defaults to the 10 year rule.

BobKamman

Level 15

The question wasn't about the withdrawal options. It was about whether a penalty applies if the choice was not made in 2024. A lot of regulations and announcements have been issued the past couple years about waiving penalties because of uncertainty about the options. Don't spin your wheels asking for a penalty to be abated when it has already been forgiven.

qbteachmt

Level 15

From the IRS:

"Inherited IRA with annual RMDs (starting in 2025)

This applies to a beneficiary if the IRA owner passed away on or after their required beginning date (RBD) for taking RMDs.

Annual distributions: You must take annual RMDs in years one through nine of the 10-year period. The amount is based on your own life expectancy.
Final distribution: The remaining balance must be completely withdrawn by the end of the 10th year.
2021–2024 waiver: The IRS waived penalties for missed RMDs for these specific inherited IRAs for the years 2021 through 2024. As a result, the first annual RMD for these beneficiaries is due in 2025."

Don't yell at us; we're volunteers

BobKamman

Level 15

@qbteachmt I'm still looking for where IRS says that, but you're right. The more we know, though, the more we don't know. Like, does the 10-year rule even apply to the brother, if he is an "eligible designated beneficiary" -- "not more than 10 years younger than the deceased account owner." Even in that case, though, he's required to take annual distributions, right? But if he didn't, those are still waived?