Updated

Updated · Los Angeles Times · Aug 30

Inherited IRA Missed Since 2010 Can Trigger 25% Penalty, Liz Weston Urges Tax-Pro Fix

Updated

Updated · Los Angeles Times · Aug 30

Inherited IRA Missed Since 2010 Can Trigger 25% Penalty, Liz Weston Urges Tax-Pro Fix

1 articles · Updated · Los Angeles Times · Aug 30

A beneficiary who skipped inherited IRA withdrawals since 2010 should work with a tax professional immediately to calculate missed distributions, taxes due and possible penalty relief, Liz Weston said.
A 25% excise tax can apply to missed required minimum distributions, and Mark Luscombe of Wolters Kluwer said the overdue withdrawals should be made as soon as possible before seeking relief.
Rules depend on the trust and timing: before the 2019 SECURE Act, many non-spouse heirs could stretch withdrawals over life expectancy, while current law generally requires inherited IRAs to be emptied within 10 years.
To reconstruct what should have been withdrawn, the adviser said a tax pro will need the trust document, the original owner’s date of death and each Dec. 31 IRA balance since 2010.

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