RMD

A Mother passed away and left an IRA with 5 benies. All the 5 benies split the contract into inherited IRA’s with the same company. now we want to transfer all the contracts out of that company. Do they have to take the inherited RMD amount out before its transferred or can it be transferred and the RMD sent out by the new company?

Thank you,
Douglas



Douglas,
Make sure the transfer is done directly, because they cannot roll a non spouse inherited IRA over after taking possession of the funds. Technically, the RMD can be taken from any inherited IRA account from the same decedent including the successor to the current IRA, but if the current custodian makes an issue of this, it might not be worth the hassle of disputing it. See att’d pasted from the Regs:
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Q–9. Is the required minimum distribution from one IRA of an owner permitted to be distributed from another IRA in order to satisfy section 401(a)(9)?

A–9. Yes, the required minimum distribution must be calculated separately for each IRA. The separately calculated amounts may then be totaled and the total distribution taken from any one or more of the individual’s IRAs under the rules set forth in this A–9. Generally, only amounts in IRAs that an individual holds as the IRA owner may be aggregated. However, amounts in IRAs that an individual holds as a beneficiary of the same decedent and which are being distributed under the life expectancy rule in section 401(a)(9)(B)(iii) or (iv) may be aggregated, but such amounts may not be aggregated with amounts held in IRAs that the individual holds as the IRA owner or as the beneficiary of another decedent. Distributions from section 403(b) contracts or accounts will not satisfy the distribution requirements from IRAs, nor will distributions from IRAs satisfy the distribution requirements from section 403(b) contracts or accounts. Distributions from Roth IRAs (defined in section 408A) will not satisfy the distribution requirements applicable to IRAs or section 403(b) accounts or contracts and distributions from IRAs or section 403(b) contracts or accounts will not satisfy the distribution requirements from Roth IRAs.

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