IRA RMD on deceased IRA | Ed Slott and Company, LLC

IRA RMD on deceased IRA

If a person (son) is named beneficiary of their Mother's Traditional IRA. Mom passes away in early 2018. RMD for 2018 was NOT taken by Mom.

Question 1 RMD for Mom's IRA should be taken before IRA is transferred to beneficiary(son) ? Take RMD before anything is done to transfer IRA ?

Question 2. If another beneficiary (daughter) takes her IRA share of Mom's Traditional IRA as an IRA and then takes full distribution of IRA. Does daughter need to do something about RMD that wasn't taken for Mom's IRA in 2018?

  1. A distribution cannot be made from the IRA until it is properly retitled, but most custodians will transfer the funds to a new inherited IRA under the son's SSN rather than having distributions from Mom's IRA under two SSNs. Therefore, the rest of the year of death RMD will typically be made from the new inherited IRA. The IRS does not care as long as the RMD is completed. 
  2. The year of death RMD is a joint responsibility of the beneficiaries. Therefore, if another beneficiary takes a full distribution from their inherited IRA share, that will complete the year of death RMD, and the son will not have to distribute any year of death RMD. Son's first beneficiary RMD for the year after the year of death will be due by 12/31 of that year. Note that if the year of death RMD is not completed in that year, which happens very frequently, a Form 5329 should be filed by the beneficiaries to request the penalty be waived. The IRS almost always grants the waiver.
 

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