While proudly showing our neat new Tax Cheat Sheet… since we are talking taxes ….
The following is a partial article from our Q 1 2024 – (yep, 24 is here) … Newsletter… This subject has already come up several times, so here we go!
A heads up on a very likely required minimum distribution tax law to occur in 2024! IRA Beneficiaries inheriting IRA’s that had already started RMD mandates, may start up again, AND also have the 10-year empty rule.
We try to make it a point not to talk too much about rules, laws, or regulations, that are not in effect, given this fact we will not spend too much time on this subject matter as this is a rule that is very much in flux, but our tax advisors that are plugged in to the appropriate channels feel there is a very high probability of this passing.
The Secure Act 1.0, first commencing January 1, 2020 changed Required Minimum Distribution (RMD) rules to allow for a non mandatory distribution as long as the funds were emptied from the beneficiaries account by the end of 10 years. Prior rules allowed for the beneficiary to draw based on his/her age thereby allowing a very lengthy draw presumably taxable mandatory draw over the lifespan of the beneficiary. At the time, not a terrible trade off, given a 10 year window to disperse.
It is highly likely that there will be rules that mandate those under this new 10 year window, if the descendant had commenced RMD’s will be forced to continue at the original rate and will additionally be forced to empty the beneficiary IRA account by the end of the 10 year term if this does not happen automatically. The one catch is the tracking of restarting this mandate, so there may be relief, but those with good insight are saying most likely this will be implemented.
Have a Great “IRS Changes Their Mind Heads UP” Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
