Inheriting an Inherited IRA: Successor Beneficiary 10-Year Rules

What the regulation says about the heir of an heir

Two paragraphs do the work. Paragraph (e)(1) of 26 CFR 1.401(a)(9)-5 says the entire interest of an employee with an individual account must be distributed “by the end of the earliest of the calendar years described in paragraph (e)(2), (3), or (4) of this section.” Paragraph (e)(2) covers a designated beneficiary who is not eligible: the year “that includes the tenth anniversary of the date of the employee's death.” Paragraph (e)(3) covers an eligible designated beneficiary: the year “that includes the tenth anniversary of the date of the designated beneficiary's death.” The statute says the same in 26 U.S.C. 401(a)(9)(H)(iii): when an eligible designated beneficiary dies with money left, the life-expectancy exception does not apply to the beneficiary's own beneficiaries and “the remainder of such portion shall be distributed within 10 years after the death of such eligible designated beneficiary.”

Publication 590-B (2025) puts the same thing for readers: “the beneficiaries of a deceased beneficiary must continue to take the required minimum distributions after the deceased beneficiary's death,” but they do not use their own life expectancies; the deceased beneficiary's remaining interest “must be distributed within 10 years after the beneficiary's death, or in some cases within 10 years after the owner's death.” The words “in some cases” are the table below.

The rules are in force for calendar years beginning on or after January 1, 2025 (T.D. 10001, 89 FR 58886, Federal Register document 2024-14542, July 19, 2024). A notice of proposed rulemaking published the same day (REG-103529-23) deals with the applicable age for employees born in 1959 and annuity-contract valuation, not with successor beneficiaries, and we did not rely on it. For an annual RMD, the preamble to T.D. 10001 says the final regulations “clarify” that the annual requirement “continues to apply for all subsequent calendar years until the employee's interest is fully distributed.”

Scenarios: who died when, who inherits, deadline, annual RMD

Every row uses an owner who died in 2025 unless stated. Dates are our arithmetic from the paragraphs cited; the 10th anniversary falls in the 10th calendar year after the year of death, and the deadline is December 31 of that year.

Source: 26 CFR 1.401(a)(9)-1, -3, -5 and 1.408-8 (eCFR, retrieved November 8, 2026); 26 U.S.C. 401(a)(9)(H)(iii); IRS Publication 590-B (2025). Dates and the “our reading” entries are our arithmetic and interpretation.

The two years that matter come from one question: was the first beneficiary an eligible designated beneficiary? Publication 590-B (2025) lists them: “the owner's surviving spouse, the owner's minor child, a disabled individual, a chronically ill individual, or any other individual who is not more than 10 years younger than the IRA owner.” Our page on the inherited IRA 10-year rule and annual RMDs walks through that test, and the one on the surviving spouse's choice covers the treat-as-own election that moves the successor into a different row.

One more row you will not find in most guides: the regulation's own deadline example in 26 CFR 1.401(a)(9)-1(b)(3)(i). An owner died in 2017, the child took life-expectancy payments and died in 2024, and “A's remaining interest in Plan X must be distributed by the end of 2034.” An old inheritance can therefore have a new 10-year clock from a recent death.

The relief for missed RMDs does not change any of this. Notice 2024-35 and its predecessors covered an eligible beneficiary's successor who failed to take a distribution in 2021 to 2024, but the preamble to T.D. 10001 says relief did not extend the 10-year deadline. For 2025 onward the penalty rules in the last section apply.

A $750,000 example: child inherits, dies in 2029, grandchild finishes (our arithmetic)

Assumptions, all ours: the owner died in 2025 at age 81, after the required beginning date; the IRA held $750,000 at December 31, 2025; the child, heir A, is 58 in 2026 and is not an eligible designated beneficiary; the account earns 5% a year and each RMD is paid at year end; heir A dies in 2029 before taking that year's RMD, and A's child, heir S, inherits. The 2026 divisor is the IRS Table I figure for age 58, 28.9, reduced by 1 each year (26 CFR 1.401(a)(9)-5(d)(3)(iii)); the owner's own remaining life expectancy at 81 (10.5 in the year of death) is shorter, and the greater of the two is used. S continues A's schedule (our reading of the regulation and of Publication 590-B), and S does not get a new 10 years.

Source: IRS Publication 590-B (2025), Appendix B, Table I; 26 CFR 1.401(a)(9)-5(d), (e)(2). Our arithmetic. The nine RMDs from 2026 to 2034 total $288,495.59.

Three things stand out. A's death moves nothing about the end date: the account is still due out by December 31, 2035. S inherits a live RMD in the year of A's death, and 26 CFR 1.401(a)(9)-5(d)(1)(i) puts the 2029 amount on S to the extent A had not taken it. And the last payment is large: at 5% the final year pays $856,607.70, which is why a plan for the final year matters more than the early years.

If the owner had died before the required beginning date, the same child and grandchild would owe nothing for nine years and the account, with the same 5% return, would be $1,221,670.97 at the end of 2035 (750,000 times 1.05 to the 10th power, our arithmetic). The annual RMDs pull $288,495.59 forward. If the child were instead an eligible sibling on life-expectancy payments who died in 2032, S would have until December 31, 2042 (our arithmetic), at the price of annual RMDs in the meantime.

Inherited IRA split between siblings, and several successors

A common question is a $750,000 IRA left to three children. The rule in Publication 590-B (2025) is that separate accounts “won't be combined for required minimum distribution purposes after the death of the IRA owner if the separate accounts or shares are established by the end of the year following the year of the IRA owner's death.” The regulation adds the other side. If separate accounts are set up later, the aggregate required distribution is worked out without the separate account rule and allocated “among the beneficiaries based on each respective beneficiary's share” (26 CFR 1.401(a)(9)-8(a)(1)(ii)); and with several beneficiaries and no separate accounts, the applicable denominator is made “using the oldest designated beneficiary” (1.401(a)(9)-5(f)(1)(i)).

Take the owner who died in 2025 after the required beginning date, three equal $250,000 shares, and heirs aged 45, 52 and 58 in 2026 (our arithmetic):

Source: IRS Publication 590-B (2025), Table I; 26 CFR 1.401(a)(9)-5(f)(1)(i), -8(a)(1). Our arithmetic. The $3,914.85 difference is the extra the two younger siblings must take in 2026 without separate accounts.

If the owner had died before the required beginning date, none of the three would owe annual RMDs under the 10-year rule, and the separate accounts would matter for something else: who sells which asset and when. The deadline is the same for all three either way. The date to remember for an owner who died in 2025 is December 31, 2026.

For several successors of one heir, the regulation text we read applies the separate-account rule to “the employee's beneficiaries”; it does not say in terms how it works for the heirs of a beneficiary. What it does say for a death-year RMD that was not taken, in 26 CFR 1.408-8(e)(4)(ii), is that “rules similar” to the owner's death-year allocation apply to a beneficiary of several aggregated IRAs, split by account balance. The deadline is the same for every successor, so the split changes only who takes what. Ask the custodian in writing how it will divide the death-year RMD and whether it will open separate accounts.

Inherited Roth IRA: no annual RMD, same clock

For a Roth IRA, 26 CFR 1.408-8(b)(1)(ii) says the minimum distribution rules apply after death “as though the Roth IRA owner died before his or her required beginning date.” A successor of a non-eligible heir therefore has no annual RMD and the original December 31 deadline. A successor of an eligible heir who was taking life-expectancy payments has the annual distributions continue, with the 10-year ceiling starting at the eligible heir's death. Whether the withdrawals are tax-free is a separate question that depends on the Roth's five-year period, which we do not cover here.

The penalty: 50% became 25%, and 10% inside the window

Section 302 of SECURE 2.0 (Pub. L. 117-328) cut the excise tax from 50% to 25%. Under 26 U.S.C. 4974(a) the tax is “25 percent of the amount by which such minimum required distribution exceeds the actual amount distributed,” paid by the payee, so a successor who misses a death-year RMD pays it. Section 4974(e) substitutes “10 percent” if the taxpayer takes the missed amount and submits a return reflecting the tax during the correction window, which Publication 590-B (2025) ends on the earliest of the deficiency notice, the assessment, or the last day of the second taxable year beginning after the year the tax is imposed. For reasonable error, the same publication allows a waiver request with Form 5329. On the $30,202.15 RMD in the example the tax would be $7,550.54 at 25% or $3,020.22 at 10% (our arithmetic). Amounts left after the final December 31 are also subject to the tax (Publication 590-B, 2025).

What to settle in the first year after a second death

1. Find the original owner's date of death and required beginning date. They fix the deadline for a non-eligible first beneficiary and whether annual RMDs apply.
2. Find out whether the first beneficiary was eligible. If yes, ten years run from that beneficiary's death; if no, the owner's date stays.
3. Ask for the first beneficiary's divisor schedule and any RMD already taken that year. The 2026 amount is the December 31, 2025 balance divided by that year's divisor; a death-year shortfall belongs to the heir.
4. Settle separate accounts by December 31 of the year after the owner's death where you still can; later, the allocation follows share of the balance.
5. Write the final date on the calendar, with a plan for how any non-cash asset will be sold, redeemed or distributed in kind. Our page on inherited 401(k)s shows how a plan transfer interacts with the same clock.

What a reader can do with this

• Ask the custodian three things in writing: which owner's death date and which beneficiary class it has on file, the divisor it is using for this year, and how much of this year's RMD was already paid to the first beneficiary.
• Run the scenario table against your own dates. Count the calendar years from the relevant death, not months, and put the December 31 date in your calendar for the year of the first death and the second.
• Check the beneficiary form on the account you now own. Your own heirs are the next successors; the deadline above does not move, but whom you name decides who takes the last distributions. If a first heir might decline, read our page on qualified disclaimers.

The penalty for a missed annual RMD is 25% of the shortfall. This is analysis of public documents, not investment, legal or tax advice.

FAQ

Sources, read and saved on November 8, 2026: 26 U.S.C. 401(a)(9) and 4974 (Cornell LII); 26 CFR 1.401(a)(9)-1, -3, -4, -5, -8 and 1.408-8 (eCFR, as of November 1, 2026); T.D. 10001, Required Minimum Distributions, 89 FR 58886 (Federal Register document 2024-14542, July 19, 2024); IRS Publication 590-B (2025). Dollar figures marked “our arithmetic” are computed from IRS Table I divisors with a 5% return assumed; they are illustrations, not forecasts.