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@ea_rva aka acctgtaxmatters wrote:

Thank you both.

How does the $50k 12/31/21 basis factor into calculating what's taxable? Only moving forward? 

I thought her basis would have been the GM basis? Do I just need to confirm that with advisor?

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The $50K is not basis, it's the FMV on 12/31/21.  If there is any IRA basis the executor might be able to get the most recent Form 8606 filed by the deceased.  I've not seen any inherited IRAs with basis yet but I'm certainly tracking enough taxpayers with 8606 forms accumulating basis.  So this will be a much bigger deal going forward and there is currently no mechanism for communicating tax basis in IRAs to beneficiaries inheriting them.

The $50K is what's used to calculate next year's RMD[1].  I'll bet you a shiny new nickel that number has nothing to do with tax basis in the inherited IRA.

Rick

[1] RMDs for inherited IRAs are currently under debate, the IRS just last month released proposed regulations indicating that RMDs *do* still apply to post-SECURE Act inherited IRAs if the decedent was already taking RMDs.  Prior to this, the general sense of Congressional Intent was that the new "10-year" distribution rules supplant the RMD rules.  IRS 2021 Publications even take this approach (10 years *instead* of RMD math).  Now new IRS proposed regulations interpret the law to mean that the RMDs still apply *in addition to* the 10-year rule.  Time will tell who's correct.  In cases of my clients inheriting IRAs post-SECURE Act, they are already spreading the distributions over the 10 years to avoid a lump-sum distribution throwing them into a higher tax bracket later.  So far I haven't had to take a tax position on RMDs.