Inherited IRA

Submitted by Eleonora Tomasello on Fri, 2020-01-24 22:46

My client just passed and he owns an IRA with his spouse as the beneficiary. My question is the following: The owner of the IRA is currently taking RMD’s but did not take the total RMD for the year. Can the spouse roll the IRA to her own account and then take the remainder of the husband’s distributions monthly instead of a lump sum?



Submitted by Alan - IRA critic on Fri, 2020-01-24 23:18

If for his final year the owner did not complete his RMD, the surviving spouse can either take it from her inherited IRA or can elect to assume ownership and then complete it from her owned IRA. However, if the year of death RMD is not completed by the year end, a Form 5329 must be filed to request the penalty waiver.  The year of death RMD must be entirely distributed before filing the 5329, so it would be best not to drag it out for the entire year unless he died in 2020. In that case, the 2020 RMD only needs to be complete by 12/31/2020 and no 5329 is needed.



Submitted by Eleonora Tomasello on Tue, 2020-02-04 19:40

The owner of the IRA passed in December 2019 and all the RMD was distributed for 2019.  The spouse just told us of his death and a January 2020 RMD was distributed.  Does the spouse need to take the husband’s RMD or calculate her new RMD based on the value of both accounts ( hers and his) as of 12/31/2019?



Submitted by Alan - IRA critic on Tue, 2020-02-04 22:42

  • Still not sure of the circumstances here. H passed in 2019. Was his 2019 RMD completed in 2019 or was the Jan, 2020 distribution his 2019 RMD?  If the Jan, 2020 distribution was not the 2019 year of death RMD, it can be applied toward the total owner’s 2020 RMD as long as she assumes ownership this year.
  • Regardless of the answer to the above, since she is evidently RMD age (reached 70.5 prior to 2020), she should elect to assume ownership of the inherited IRA ASAP. She can then combine the two accounts if she wishes. Her 2020 RMD for both accounts is calculated using the 12/31/2019 balances and the Uniform Table. She can apply the amount already distributed in January to the total RMD UNLESS the January distribution was to complete the 2019 year of death RMD for H.


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