Revised IRS Publication 590-B Includes Surprise for Post-SECURE Act Inherited IRA Beneficiaries, Apr. 30, 2021

The IRS' recently revised Publication 590-B contained a surprise interpretation that could impact beneficiaries of inherited IRAs who are now subject to the SECURE Act's 10-year rule. Under the 10-year rule, inherited IRA balances must be depleted within the first 10 years after the original account owner's death unless the beneficiary is an eligible designated beneficiary. Most expected the new "10-year rule" would be interpreted in the same manner as the old "five-year rule", meaning that RMDs would not be required each year during the 10-year period. In one revised example, however, the IRS indicated that the beneficiary would be required to take a distribution each year during the 10-year period For more information on the new 10-year rule, see Q 3691.