RMD in year of death

Submitted by Neil Renner on Fri, 2017-12-15 17:24

If an RMD was not completely taken in the year of death. Is the estate required to take the balance of the RMD and pay taxes before it is distributed to the non spouse beneficiary?



Submitted by Alan - IRA critic on Fri, 2017-12-15 18:04

No. If the non spouse was the direct beneficiary on the account, that non spouse is responsible for completing the year of death RMD. It will be paid to the non spouse and reported to the non spouse on a 1099R, then reported by the non spouse on their own 1040.  The estate has no part of this UNLESS the estate was the beneficiary of the account.



Submitted by Neil Renner on Fri, 2017-12-15 19:19

Is that based on the RMD factor for the deceased or the RMD of the beneficiary?



Submitted by Alan - IRA critic on Fri, 2017-12-15 20:06

The year of death RMD is what the decedent would have distributed. It is based on the age of the decedent at year end of the RMD year and the Uniform Table. 



Submitted by Kerry Schepers on Fri, 2017-12-22 17:00

Does the beneficiary have until the YEAR AFTER the year of death to get the “year of death RMD done?” Or do they have to file the 5329?  I thought there was a rule where the beneficiary has until the year after the date of death to take care of  RMD.  Thanks



Submitted by Kerry Schepers on Fri, 2017-12-22 17:09

Does the beneficiary have until the YEAR AFTER the year of death to get the “year of death RMD done?” Or do they have to file the 5329?  I thought there was a rule where the beneficiary has until the year after the date of death to take care of  RMD.  Thanks



Submitted by Kerry Schepers on Fri, 2017-12-22 17:15

last one, if the estate is listed as beneficiary, does the estate have to remain open for all the RMD years? 



Submitted by Alan - IRA critic on Fri, 2017-12-22 19:07

  • The beneficiary is responsible to complete the year of death RMD in the year of death if the decedent did not complete it. However, in practice the IRS knows that in many cases this is impossible, including cases where the IRA owner dies late in the year. Therefore, the IRS routinely waives the penalty if the beneficiary files the 5329 and completes the year of death RMD in the following year. Now the beneficiary’s OWN RMD as beneficiary is different and that one must be completed by 12/31 of the year following the year of death. 
  • If the estate is the beneficiary, it does not have to remain open. The executor can assign the inherited IRA to the estate beneficiaries and close the estate or assign the IRA and keep the estate open for other reasons if they want to. The estate can either receive the RMD and pass it through to the beneficiaries of the estate or assign the IRA to the beneficiaries soon enough so that no distribution is made to the estate, but to the beneficiaries of the estate to their own inherited IRA accounts. 


Add new comment

Log in or register to post comments