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Taxes on Inherited IRA for decedent after December 31, 2019


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An inherited IRA is the type of Individual retirement account that is passed down to an individual after the account owner's death. If the account owner died after December 31, 2019, there are certain rules and regulations in place regarding the taxes associated with the account. Firstly, it is vital to understand that the rules differ significantly depending on the relationship between the account owner and the individual inheriting the IRA. A spouse, for instance, has the option of treating the IRA as their own by transferring the funds into an IRA they own in their name or rolling over the funds into a new IRA established in their name. If the IRA is inherited by a non-spouse individual, the options are different. The beneficiary can withdraw the entire balance of the account by December 31 of the year that follows the account owner's death, suffer from the applicable taxes, and incur no penalties. Alternatively, they can choose to take distributions from the inherited IRA over ten years or more instead of taking the lump sum. Under the SECURE Act, passed in 2019, this ten-year rule applies to inherited IRAs with account owners passing away after December 31, 2019. As such, those who inherit an IRA from an account owner dying after this date must withdraw and pay the taxes within ten years of the account owner's death. However, there are exceptions to this ten-year rule. For example, if the beneficiary is a minor child or disabled, they may stretch out the required minimum distributions over their lifetime. In this scenario, the required minimum distributions would be calculated using single life expectancy tables. In summary, if you inherit an IRA from an account owner who died after December 31, 2019, it is essential to understand the rules and regulations for tax purposes. Regardless of your relationship with the account owner, consult with a financial advisor or tax professional to ensure you understand the tax implications and make the best financial decisions for your situation. https://inflationprotection.org/taxes-on-inherited-ira-for-decedent-after-december-31-2019/?feed_id=83301&_unique_id=642769adac8bd #Inflation #Retirement #GoldIRA #Wealth #Investing #InheritedIRA

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