SECURE Act 2.0 adult-child beneficiary rules for gold IRA

Updated: July 30, 2026

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The SECURE Act of 2019 and its SECURE 2.0 amendments (signed December 2022 as Title I of the Consolidated Appropriations Act, Public Law 117-328) ended the stretch IRA for most non-spouse beneficiaries. For a federal contractor or military retiree planning the disposition of a TSP-rolled gold IRA, the practical consequence is concentrated on a single beneficiary type: the adult child.

Adult children are non-eligible designated beneficiaries under IRC §401(a)(9)(H), which means the inherited balance has to be fully distributed within ten years of the original owner’s death.

The mechanics matter because the metals held in a gold IRA are not liquid in the same way a Vanguard money-market position is. The distribution sequence has to be designed before the death event, not after.

The rules below apply to gold IRAs held by parents in the 55-75 retirement-planning bracket and inherited by adult children. That means anyone over the age of majority who is not disabled, chronically ill, or within ten years of the decedent in age.

For the parallel scenario where the surviving spouse inherits the gold IRA instead, our spousal inherited IRA decision guide covers the spouse-as-EDB conduit option, which works differently from everything described here.

How we selected the eight rules

The eight rules below are the SECURE Act 2.0 beneficiary mechanics that appear most often in inherited-IRA service tickets at custodians that handle gold IRAs (Equity Trust, STRATA, Kingdom Trust, Madison Trust, Preferred Trust).

The selection draws on the final SECURE regulations published July 18, 2024 (89 FR 58886). It also draws on IRS Notice 2024-35 on transitional RMD relief and the IRS frequently-asked-questions page on the SECURE Act. IRS Publication 590-B Chapter 1 on distributions rounds out the source set. Each rule names the IRC section or regulation behind it.

We sequenced them in the order a contractor planning estate disposition would encounter them: classification first, distribution timeline second, account-type interactions third, gold-specific mechanics fourth, the failure mode last.

Rule 1: Your adult child is a non-eligible designated beneficiary, not an EDB

The SECURE Act split designated beneficiaries into two categories. Eligible designated beneficiaries (EDBs) keep something close to the pre-2020 stretch IRA: they take RMDs over their own life expectancy. Non-eligible designated beneficiaries (non-EDBs, the new default for most non-spouse inheritors) are subject to the 10-year drain rule. Adult children fall into the non-EDB category in nearly all circumstances.

The five EDB categories under IRC §401(a)(9)(E)(ii) are the surviving spouse and a minor child of the decedent (only until they reach the age of majority, then the 10-year clock starts). They also include a disabled individual as defined in IRC §72(m)(7), a chronically ill individual, and any other individual not more than ten years younger than the decedent.

For a federal contractor in the 55-65 bracket leaving a gold IRA to adult children in their 30s or 40s, the second-to-last EDB category (not more than ten years younger) does not apply.

The classification is procedural and binding. Once the death certificate is filed and the custodian processes the beneficiary form, the IRS treats the inherited account under the 10-year rule by default. There is no election to opt into EDB treatment after the fact.

The classification controls everything downstream, so it deserves to be confirmed in writing with the custodian before the distribution sequence is drafted.

Rule 2: The full balance has to come out by December 31 of year 10

The 10-year clock runs from the calendar year after the year of the original owner’s death. A parent who dies in March 2026 leaves an inherited gold IRA the adult child must fully distribute by December 31, 2036.

The year-10 deadline is the end of the tenth full calendar year, not a literal ten-year anniversary.

The clock does not pause, accelerate, or extend for any reason short of a successor-beneficiary death event during the 10-year window (which carries its own complications under the final SECURE regulations).

The 10-year deadline is a balance deadline, not a timing constraint on distributions before then. The adult child can take any amount in any year from year 1 through year 10, provided the December 31 year-10 balance is zero.

That flexibility matters for tax planning. A contractor’s adult child who has high W-2 income in years 1 through 4 can defer distributions to a lower-income year, such as a sabbatical or layoff in year 5.

For a gold IRA specifically, the distribution timing also has to coordinate with the inherent illiquidity of the metals position, which is the subject of Rules 6 and 7 below.

Rule 3: Annual RMDs apply in years 1-9 if the parent died after starting RMDs

The pre-RBD versus post-RBD distinction is the most-litigated procedural question of the SECURE 2.0 era. RBD is the required beginning date for RMDs on the original owner’s traditional IRA, currently April 1 of the year after age 73 (rising to age 75 in 2033 under SECURE 2.0).

If the parent died before reaching the RBD, the adult child can take any combination of distributions during years 1 through 9 (including zero) and clear the balance in year 10.

If the parent died after the RBD, the adult child must take a minimum annual distribution in each of years 1 through 9. These are calculated under the single-life-expectancy table at IRS Publication 590-B, Appendix B Table I, in addition to clearing the year-10 deadline.

The IRS waived the annual-RMD requirement for 2021 through 2024 under transitional relief (the cumulative effect of Notices 2022-53, 2023-54, and 2024-35), but the relief expired effective with the 2025 distribution year.

Adult children who inherited a gold IRA from a post-RBD decedent during 2020 through 2024 face the full year-1-through-9 annual RMD schedule starting in 2025. That schedule is calculated on the inherited balance as of December 31, 2024. The relief did not retroactively forgive the missed RMDs. It only waived the excise tax that would otherwise have applied.

Rule 4: Inherited Roth gold IRA balances skip the annual RMD but still drain in 10 years

If the parent’s gold IRA is a Roth IRA, the adult child is still subject to the 10-year drain under SECURE Act 2.0. However, the year-1-through-9 annual RMD requirement does not apply, regardless of whether the parent had reached an RBD.

Roth IRAs have no RBD for the original owner under IRC §408A(c)(5), so the post-RBD versus pre-RBD distinction in Rule 3 collapses for Roth inheritances. The adult child can defer the entire balance to a single distribution in year 10, take it out in equal annual slices, or any pattern in between.

The qualifying-distribution test for the inherited Roth still applies. If the parent held the Roth IRA for at least five tax years before death, the 5-year clock under IRC §408A(d)(2) is satisfied. In that case, distributions to the adult child are entirely tax-free, both principal and earnings.

If the parent’s 5-year clock had not run, principal still comes out tax-free, but earnings withdrawn before the parent’s 5-year clock would have completed are taxable as ordinary income. The parent’s clock continues running after death and is measured from the parent’s first Roth IRA contribution year, not from any clock that starts in the adult child’s inherited IRA.

Rule 5: Combat-zone tax-exempt basis carries to the inherited IRA but requires Form 8606

For a parent who was a military service member and contributed traditional TSP from combat-zone tax-exempt pay under IRC §112, the basis layer survives the rollover to a self-directed gold IRA. That basis layer also survives the death event.

The inherited IRA carries the same basis structure: the contribution principal was never taxed and is not taxed at distribution; only the earnings on that principal are taxable as ordinary income to the adult child. The mechanics on the receiving end depend entirely on documentation.

The adult child has to file Form 8606 with their federal return for each year a distribution is taken from the inherited IRA, allocating the proportional basis recovery.

If the parent never filed Form 8606 (a frequent omission), the adult child can reconstruct the basis from the parent’s TSP-3 service-history statement and the rollover paperwork to the gold IRA. The TSP records the tax-exempt layer on TSP-3 but does not generate a Form 8606.

The IRS has accepted reconstructed basis in private letter rulings when the supporting documentation is complete. For the parallel discussion on the parent’s side, see our contractor 401(k) and TSP consolidation guide, which covers the basis inventory before the original rollover.

Rule 6: Gold can be distributed in-kind, but the dealer choice constrains the option

The inherited gold IRA holds physical metals (coins and bars at an IRS-approved depository), not cash. To complete the 10-year drain, the adult child has two structural choices for each distribution. Option one: instruct the custodian to sell the metals at the dealer’s bid price and distribute the cash proceeds.

Option two is to take in-kind distribution of the actual metals, which then become the adult child’s personal property held outside any IRA. The in-kind option preserves the metals position, which is useful if the adult child believes the gold price will rise after distribution. However, it creates a personal-storage problem and forecloses later selling at the original dealer’s bid spread.

The dealer relationship the parent established controls how usable each option is. A dealer with transparent bid-ask spreads and a published buyback policy makes the cash-distribution path predictable.

A dealer that sold the original metals at a wide spread and offers buyback only at a punitive haircut effectively forces the adult child into in-kind distribution, even when cash would be more useful.

The Augusta Precious Metals buyback policy (no liquidation fee, published bid-spread guidance) is one of the data points we cited in our 2026 ; not all dealers operate that way. The parent’s initial dealer choice is a 10-to-20-year decision because of this downstream constraint.

Rule 7: The custodian and depository have to be maintained through the full 10 years

The inherited gold IRA is a separately-titled account at the same custodian or, in some cases, a custodian the adult child elects to transfer to under a direct-trustee-to-trustee transfer of the inherited account. Either way, an IRS-approved custodian must hold the account for the full distribution period. The Tax Court rejected home storage of IRA gold in McNulty v.

Commissioner, 157 T.C. No. 10 (2021), and reclassified the entire IRA balance as a taxable distribution. The McNulty holding applies equally to inherited IRAs: the adult child cannot move the inherited metals to a home safe at any point during the 10-year window without triggering the full distribution as taxable.

The depository fees and the custodian’s annual administration fee continue to accrue against the inherited account for the entire 10-year period. For a $250k inherited gold IRA at a custodian charging $200 annual administration and a depository charging $150 annual storage, the carrying cost is $3,500 over ten years before any sale.

The adult child can offset that by accelerating distributions in low-tax years, which reduces the balance the fees are calculated against (or which simply removes the account altogether). The fee structure is not a tax issue per se, but it informs the distribution timing.

Rule 8: Missing the year-10 deadline triggers a 25% excise, reducible to 10%

If the adult child fails to clear the inherited gold IRA balance by December 31 of year 10, the residual balance is subject to the excise tax under IRC §4974. SECURE 2.0 reduced the base excise from 50% (the pre-2023 rate) to 25%.

A timely correction (taking the missed distribution within two years of the deadline and filing Form 5329 with a reasonable-cause statement) reduces the excise further to 10%.

The IRS has indicated through the FAQ guidance accompanying the final SECURE regulations that the corrective distribution does not have to be voluntary. An audit-triggered correction can also qualify for the reduced rate, provided the two-year window has not closed.

The penalty applies to the residual that should have been distributed, not to the full inherited balance.

Consider an adult child who takes $180,000 out of a $200,000 inherited gold IRA by year 10 and leaves $20,000 in the account on December 31 of year 10. The 25% excise applies to the $20,000. That produces a $5,000 penalty, reducible to $2,000 if corrected within two years.

The full inherited balance at the start of year 10 is not the penalty base; only the residual at the deadline is.

The procedural sequence the adult child should follow after the death event

Once the death certificate is filed and the custodian processes the beneficiary form, the adult child’s procedural path through the 10-year drain follows a five-step sequence. Done in this order, the eight rules above apply cleanly and the distribution timing aligns with the tax planning. Done out of order, the adult child can end up with a missed RMD in year 1, a basis-reconstruction problem in year 3, and a residual balance heading into year 10.

Tax treatment side by side: traditional, Roth, and combat-zone basis layers

The three balance components an adult child can inherit from a parent’s gold IRA are taxed on different bases. Side-by-side treatment matters for the distribution schedule because the tax cost of the same dollar varies sharply depending on which layer it came from.

The Roth column is the lowest-friction inheritance scenario by a wide margin. The combat-zone basis column shifts a meaningful fraction of the distribution out of ordinary income, but only if the Form 8606 trail is intact. The traditional column is the heaviest because every distribution dollar is taxed at the adult child’s marginal rate in the year of distribution.

Edge cases: successor beneficiaries, see-through trusts, and disclaimers

Three edge cases appear often enough in inherited gold IRA service tickets to deserve named procedural notes.

Successor beneficiaries. If the adult child dies during the 10-year window, the original 10-year clock continues to run for the successor beneficiary (usually the adult child’s spouse or own children). The successor cannot start a new 10-year clock.

If the original parent died in 2026 and the adult child dies in 2031, the successor has until December 31, 2036 to clear the balance, the same deadline that applied to the original adult child. The final SECURE regulations published July 2024 confirmed this interpretation.

See-through trusts. If the parent names a trust as the beneficiary rather than the adult child directly, the see-through trust rules under Treas. Reg. §1.401(a)(9)-4 determine whether the underlying beneficiaries are treated as designated beneficiaries.

A properly drafted conduit trust passes the 10-year clock through to the adult child as if they were the named beneficiary. An accumulation trust can result in a 5-year rule applying if the trust does not meet the see-through requirements.

The drafting matters: a generic revocable living trust written before 2020 is unlikely to handle the SECURE Act distributions correctly without amendment.

Qualified disclaimers. An adult child can disclaim the inherited IRA under IRC §2518 within nine months of the death event, in which case the account passes to the contingent beneficiary as if the original child had pre-deceased.

This is useful when the adult child has a marginal-rate problem (high W-2 income through the 10-year window) and a contingent beneficiary in a lower bracket (a grandchild, a sibling). The disclaimer must be unconditional and irrevocable. Partial disclaimers are permitted under specific Treasury regulation conditions.

Frequently asked questions

Does the SECURE Act 2.0 10-year rule apply to my adult child if I died before 2020?

No. The SECURE Act applies to deaths occurring after December 31, 2019. Adult children of decedents who died before that date keep the pre-2020 stretch IRA rules and take RMDs over their own life expectancy.

Can my adult child roll the inherited gold IRA into their own IRA?

No. Only a surviving spouse can roll an inherited IRA into their own IRA. An adult child can only continue the inherited IRA as a separately-titled inherited IRA at the same or another custodian, with the 10-year drain rule in force.

What happens if I name multiple adult children as co-beneficiaries?

The custodian splits the inherited account into separate inherited IRA accounts for each adult child, each with their own 10-year clock and their own distribution schedule. The split must be completed by September 30 of the year after the parent’s death (the determination date under Treas. Reg. §1.401(a)(9)-4) to preserve the per-beneficiary 10-year treatment; otherwise the oldest beneficiary’s life-expectancy figures apply to all.

Does the 10-year rule allow my adult child to take all the gold in year 1?

Yes. The 10-year deadline is a maximum, not a minimum spread. An adult child can take the full balance in year 1, in equal annual slices across years 1 through 10, or in any front-loaded or back-loaded pattern. The trade-off is the marginal-rate compression of taking the full distribution in a single tax year.

Is the inherited gold IRA subject to state income tax on distribution?

The state-tax treatment follows the adult child’s state of residence at the time of each distribution, not the parent’s state. Nine states do not tax retirement-account distributions (Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, and New Hampshire on a phaseout schedule). All other states tax the distribution at their applicable rate, with exemptions or partial exclusions varying widely. Consult a CPA familiar with the adult child’s resident state before scheduling the year-10 balloon distribution.

The estate-planning deliverable is a single-page memo the parent leaves alongside the will. It names the custodian, the depository, the dealer, and the account numbers (traditional IRA and Roth IRA separately). It also lists the beneficiary designation on file, the basis layers if any (combat-zone tax-exempt, after-tax non-Roth), and the location of supporting documents (TSP-3, Form 8606 history, rollover paperwork).

The adult child reads that memo within days of the death event and has the substrate for everything in Rules 1 through 8 above. The dealer-selection decision sits underneath the memo; a dealer that fails BBB or CFTC scrutiny is a dealer the adult child inherits along with the metals.

The check on gold IRA dealers is the starting point for that decision.

Sources cited

1. SECURE 2.0 Act of 2022, Division T of the Consolidated Appropriations Act 2023 (Pub. L. 117-328)
2. Federal Register, Required Minimum Distributions Final Rule (July 19, 2024)
3. IRS Publication 590-B, Distributions from Individual Retirement Arrangements
4. IRS Notice 2024-35, Transitional Relief for Certain Required Minimum Distributions
5. 26 U.S.C. §401(a)(9), Required Minimum Distribution rules and the 10-year rule
6. 26 U.S.C. §408A, Roth IRAs (five-year rule and qualified distribution rules)
7. 26 U.S.C. §2518, Qualified Disclaimers (nine-month window and conditions)
8. 26 U.S.C. §4974, Excise Tax on Insufficient Distributions (penalty structure)
9. McNulty v. Commissioner, T.C. Memo 2021-138 (US Tax Court, home-storage gold IRA reclassified as taxable distribution)

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