Tax Playbook · Big life moves
The 10-year inherited IRA rule
Most people who inherit an IRA from a parent must empty it by December 31 of the tenth year after the death. If the owner had already started required payouts, you must also take money out in years 1–9; missing one can trigger a 25% penalty (10% if you fix it quickly). Spouses, minor children, and people with disabilities may qualify for different, friendlier rules. Emptying a $300,000 inherited IRA all in one year adds $300,000 to your taxable income, so spreading payouts can mean a lower tax bill.
Good for: Anyone who just inherited a retirement account.
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Recent articles & guides
- TheStreet: the inherited IRA 10-year rule
- Howe & Rusling: understanding the SECURE Act inherited IRA rules
- Brady Ware: new IRS regulations for inherited IRAs
- Accounting Insights: inherited IRA distribution rules for beneficiaries
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Educational summary, not tax advice. Limits and rules change — confirm current law with your tax adviser.