Heirs Finally Get an Answer From IRS About Money in Inherited Retirement Accounts - WSJ

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7. Some questions answered

Because there has been confusion about the new rules, many people didn’t take distributions in the last several years. The IRS has essentially excused them, saying it won’t penalize people in this situation for failing to take required payouts for the years 2021 through 2024.

You have to start taking annual withdrawals in 2025, with the calculation of how much based on your life expectancy. If you were worried about having to make a big payout in 2025 because you skipped withdrawals from 2021 through 2024, that won’t be the case.

If someone died and left you an IRA before they had to take withdrawals, you are allowed to take the money out any time during the 10-year period

((beware though about taking out the least amount that you have to - and then having a big balance that one must take out in year 10, which might push you up a tax bracket or two. Probably better to take out a chunk every year so you don't have so much left in year 10 -- as the lost benefit of a few extra years of tax-deferred compounding would not make up for the tax hit of paying taxes in year 10 at a higher marginal tax rate -Progree))

The best type of IRA to inherit is a Roth IRA. You don’t have to take the money out until the 10th year, and withdrawals are generally tax-free.

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