IRS Issues Final Regulations on Inherited IRAs

The IRS has now confirmed that starting in 2025 RMDs are required for most non-spouse beneficiaries in each of the ten years following the death of the account holder.

The account must be $0 by the end of the tenth year. 

These final regulations apply only when the deceased was over the age of 73 at time of death and was already taking RMDs. 

If the account owner at time of death was under the age of 73, the beneficiary can withdraw the funds anytime during the 10-year period and no annual RMD is required. 

However, taking an annual distribution may be more tax-efficient than waiting until the tenth year, taking large distribution, and getting hit with a large tax bill.