RMD from an inherited IRA
Hi,
My minor boys inherited an IRA from my parents when they passed away. Last week I received a letter stating that they (Financial Institution) records indicating that the boys are not currently set up to receive systematic distributions. And if they do not take a distribution--it could result in a 50% penalty tax on the difference between the amount they actually received & RMD.
They also stated the IRS generally requires that RMD's begin no later than December 31st of the year following the deceased IRA owner's year of death. My mother passed away in January of 2004--my dad 2 years before her. They also informed us that under certain circumstances, we may elect to delay the distributions as long as the entire account is distributed by December 31st of the year containing the fifth anniversary of the IRA owner's death.
Could you please explain all this in layman terms. And what we are supposed to do & when we're supposed to do it? I really look forward to an answer--not to mention, how much an answer would be appreciated! THANK YOU, Evelyn