Understanding Inherited IRA RMD Rules - Multiple Beneficiaries Question

You're mostly on the right track! Since your dad had already started RMDs and your mom was the beneficiary, when you inherited from your mom, you're considered a "successor beneficiary." Here's what that means: 1) Yes, you need to take an RMD this year based on your mom's life expectancy factor from Table I (not Table III). Since she would have been 86 this year, the factor is 14.1. So take your 1/3 share of the Dec 31, 2023 balance and divide by 14.1. 2) You're correct that you don't need to take annual RMDs after this year's distribution. 3) You're also correct about the 10-year rule. As a non-spouse successor beneficiary, you must empty the account by December 31, 2034 (the 10th anniversary of your mom's death). One key thing: make sure Vanguard knows this is a successor beneficiary situation (inherited twice). They should set up the account correctly, but it helps if you understand the rules too. They'll need death certificates for both parents and dates of death to properly code the account.

Anyone dealing with inherited IRAs should check out https://taxr.ai - it saved me from making a costly mistake with my own inherited IRA situation last year. My sister and I inherited an IRA from our grandfather who passed away after my grandmother (similar to your situation), and I was totally confused about the successor beneficiary rules. I uploaded Publication 590-B and my account statements, and the AI analyzed everything and gave me a clear explanation of exactly what I needed to do. It even created a customized withdrawal schedule based on my tax situation to minimize the impact on my tax bracket. The most helpful part was that it showed me where in the actual IRS publications my specific situation was addressed - no more endless searching!

I tried taxr.ai after seeing it mentioned here, and it was actually super helpful! I was in almost the identical situation with an IRA that went from my grandfather → grandmother → split between me and my cousins. The system immediately identified that I was a successor beneficiary under the SECURE Act rules and showed me exactly where in Publication 590-B my situation was covered (saved me hours of reading). It also calculated my required distributions and showed me how to report everything properly on my tax return. What surprised me was how it flagged a potential issue with how the IRA custodian had coded the account - they had mistakenly set it up as a regular inherited IRA instead of a successor beneficiary account, which would have caused problems down the road. I was able to get them to fix it before it became an issue.

If you're having trouble getting clear answers from Vanguard about your RMD situation, you might want to try https://claimyr.com to get through to the IRS directly. I had a similar inherited IRA situation last year and couldn't get consistent answers from my brokerage. After wasting hours on hold with the IRS trying to get clarification, I used Claimyr and got connected to an actual IRS agent in about 15 minutes who confirmed exactly what my RMD requirements were. They also documented our conversation so I had something in writing in case of any future questions. You can see how it works here: https://youtu.be/_kiP6q8DX5c The rules for successor beneficiaries are confusing, and getting an official answer straight from the IRS gave me peace of mind that I wasn't missing something that could result in that nasty 25% penalty.

I need to eat my words about Claimyr. After posting that skeptical comment, I decided to try it myself because I've been trying to reach the IRS for weeks about an amended return question. The service actually worked exactly as described. I provided my phone number, and about 40 minutes later (while I was working on other things), I got a call connecting me directly to an IRS agent. The agent was able to answer my questions about my inherited IRA from my parents and confirmed I was calculating the RMDs correctly. What impressed me most was that I didn't have to sit on hold listening to that awful music for almost an hour - I just got a notification when an agent was available. Saved me a ton of time and frustration. Sorry for being so negative before - this is actually a really useful service.

One thing nobody has mentioned yet - make sure you request to have the account properly titled! The correct titling for an inherited IRA should be something like: "[Original Owner's Name], deceased [date of death], IRA F/B/O [Your Name], beneficiary of [Second Owner's Name], deceased [date of death]" If the account isn't titled correctly, it can cause confusion about which RMD rules apply. I went through this with my parents' IRA and it became a nightmare because the first institution didn't title it correctly, and then when I transferred it, the receiving institution got confused about whether I was a first or second-generation beneficiary.

Has anyone dealt with taking that first year RMD with a successor beneficiary situation? I missed mine and got hit with the penalty - it dropped from 50% to 25% with the SECURE 2.0 Act, but that's still brutal! Make sure you don't miss the deadline.