IRA IRA Beneficiary Rules and Inherited IRAs

Question 1

Under the SECURE Act, what distribution rule generally applies to non-spouse beneficiaries who inherit a traditional IRA from an owner who died after December 31, 2019?

Accepted Answer

10-year rule — the account must be fully distributed by the end of the 10th year following the owner's death

Answer

Stretch IRA over beneficiary's lifetime

Answer

5-year rule — all funds must be distributed within 5 years

Answer

25-year rule for minors

Question 2

Which of the following is an 'Eligible Designated Beneficiary' (EDB) who can still use the lifetime stretch IRA rule?

Accepted Answer

Surviving spouse

Answer

Adult child of the deceased

Answer

Trust named as beneficiary

Answer

Estate of the deceased

Question 3

A surviving spouse who inherits an IRA can choose to treat it as their own IRA. What is the main benefit of this election?

Accepted Answer

They can delay RMDs until they reach their own RMD age

Answer

They immediately avoid all taxes on distributions

Answer

They can contribute unlimited amounts to the inherited IRA

Answer

They can convert it to a Roth IRA tax-free

Question 4

What is the 'at least as rapidly' rule in the context of inherited IRAs?

Accepted Answer

Once RMDs have begun, the beneficiary must continue distributions at least as rapidly as the original owner was taking them

Answer

Distributions must accelerate each year

Answer

Beneficiaries must take distributions monthly rather than annually

Answer

The account must be fully distributed within 10 years

Question 5

What happens if a non-spouse beneficiary inherits a Roth IRA?

Accepted Answer

They are subject to the 10-year rule but qualified distributions remain tax-free

Answer

They must pay taxes on all distributions immediately

Answer

They can treat it as their own Roth IRA

Answer

They must convert it to a traditional IRA

Question 6

By what date must a beneficiary be identified to use the life expectancy method for inherited IRA distributions?

Accepted Answer

September 30 of the year following the year of death

Answer

Date of death

Answer

December 31 of the year of death

Answer

April 15 of the year following the year of death