Question

In 2002, Jim began making contributions to an IRA. He made his sister, Mary, beneficiary of his IRA. In 2021, Jim died at age 74. What is the maximum IRA distribution period?

Answer 1

Since Jim died in 2021, the maximum IRA distribution period for his sister, Mary, as a non-spouse beneficiary, is typically 10 years after the year of Jim's death, according to the rules established by the SECURE Act.

Step-by-step explanation:

The maximum IRA distribution period depends on the type of IRA and the relationship between the IRA owner and the beneficiary. Since the account owner, Jim, died in 2021 at the age of 74, it's important to know whether it was a Roth or traditional IRA to provide a precise answer. However, the IRA distribution rules changed with the passage of the SECURE Act at the end of 2019. For deaths occurring in 2020 and later, most non-spouse beneficiaries, including siblings, will be subject to the 10-year rule. This rule requires the IRA to be fully distributed by December 31 of the 10th year following the year of the owner's death. In this scenario, Mary, Jim’s sister and beneficiary, would generally be required to empty the IRA by December 31, 2031.