A. The rules for how quickly an inherited IRA must be withdrawn depends on whether the original owner died before or after the “Required Beginning Date” (RBD) for taking “Required Minimum Distributions” (RMD), and whether the account had a designated beneficiary.
The RBD for an IRA is April 1st of the year following the year in which the original account owner turned 70½. It does not matter if the owner had taken distributions from the IRA prior to his/her RBD.
If there is no named beneficiary on the account the monies must be distributed under the 5-Year Rule (the entire account balance must be distributed by the end of the calendar year 5 years after death) if the original owner passed before reaching his/her RBD. If the owner died after beginning to receive RMDs, the withdrawals can be taken over the remaining life expectancy of the deceased.
The IRS has special tables for calculating RMDs based on “life expectancy”. The RMD is just than – a required minimum distribution. You can always take out more than the required minimum.
The beneficiary can also elect to receive a “lump-sum” distribution, or he/she can chose to have the monies distributed under the 5-Year Rule.
Confusing, isn’t it? The bottom line is – it appears that all three options are available to you.