Clients who under the proposed regs must take an RMD in 2022 should discuss the potential tax effects with advisors, Gillette said, as it “could affect planning that had been done under the original interpretation of the SECURE Act, resulting in income being received and taxed in years earlier than anticipated, as well as cash flow to beneficiaries being accelerated.”

“The RMDs were suspended for 2020, but not for 2021,” Gillette said, “so there’s still a question [that final regs may address] that makeup distributions for missed 2021 RMDs may be required.”

Clients may feel they’re off the hook for this year, but “going forward they’re subject to both the annual RMD and 10th-year complete distribution requirement or [they] risk paying the 50% excise tax,” Slatter said.

“Because taxpayers won’t be penalized for not taking the 2021 and 2022 RMDs, it is unclear whether they ever need to be taken” said Karen Goldberg, partner-in-charge in the trusts and estates practice of the Eisner Advisory Group in New York. “More guidance is needed from the Treasury and the IRS.”

Congressional talks to further extend the RMD age to 75 could delay final regs, Gillette added.

“The most important consideration at this point is that final regulations haven’t yet been issued,” Borglum said. “There shouldn’t be a push for drastic strategy changes or immediate action this year.”

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