Some Inherited IRA beneficiaries subject to 10YR rule may receive an additional year's deferral of mandatory RMD requirements

[Allen Trent]

This seems to me to be an oversimplification. It doesn't recognize that tax calculations are the result of interplay between Income, Deductions and Credits. Nor does it recognize that "Income" is not one monolithic category of money coming to a taxpayer or into a household. An individual taxpayer may have multiple types of income and deductions and credits they are eligible for. If we talk about a household, rather than an individual, the situation can become even more complex because it might be important to know which household member income, deductions or credits are associated with.

In the specific situation we are talking about, Inherited IRA's, the 10 year RMD rule, and IRS leniency on requiring RMD's in 2020, 2021, 2022, and 2023, there is a household taxable income shifting opening that may provide benefit to the taxpayer when consideration goes to the full Income-Deduction-Credit picture, rather than just taking the one-size-fits-all concept of RMD's should not be deferred (so Income recognition should not be timed). An example might be obtaining reduction in HealthCare Insurance costs which are hooked to tax filing.

Fair enough. However, do all those same calculations you are talking about. Example $100k inherited IRA. Take $10k out equally for 10 years. Now, take 0 for 4 straight years, then RMD only for next 5 years & finally the large lump sum in the 10th year. Most taxpayers will have benefited from equal installments. Now factor in that 2020, 2021, 2022, 2023 were years that had larger standard deduction & lower tax rates than will be the case in 2025 when tax rates & standard deduction revert back to 2017 levels. Also factor in possibly having 85% SS checks taxed rather than 50% or less depending on other income........but for some, it definitely can be ok to defer if their tax return can benefit

PS--the government currently prefers seniors defer as much as possible & take as little as possible while alive because they know most will pay little or no taxes compared to what will be owed by most beneficiaries, especially those still working when inheriting funds