My father died this year and named me the sole beneficiary of his IRA. I hear I have to take all the money out of the IRA within 10 years of his death. Is this true?
While there are a lot of exceptions to the general rule (ask me further questions and I will attempt to answer them), generally speaking, all the money in the IRA must be distributed to you and taxed by 12/31 of the 10th year following his death. Assuming your father died in July of 2023, all the money would need to be distributed and taxed by 12/31/33 (about 10½ years later). Nevertheless, there are still required minimum distribution rules that you must follow during the 10 years.
First, in 2023, you have to make sure that your father’s last RMD was taken, either by him before he died or if not, by you (by 4/15 in the following year, plus extensions.). Thereafter, assuming your father died after his required beginning date (somewhere between 70 1/2 and 73, depending upon his date of death), you will have to take RMDs based on your life expectancy each year, with the entire remaining balance being your RMD in 2033.
I hope this helps! Please forward this information to your friends and relatives to share these informative answers to some very commonly asked questions.