RMD in year of death
If an IRA owner dies after his required beginning date and has not taken the RMD for the year of death, and the balance of that IRA is tranferred to each of the individual beneficiaries who are children of the IRA owner, do the children then take an RMD for the year of death from their own accounts based on the deceased IRA owners life expectancy? If so, does the distribution count as income on the deceased owners final tax return or the beneficiaries tax return?
Permalink Submitted by Alan Spross on Thu, 2007-10-11 03:04
Each beneficiary must take the share of the delinquent RMD that the owner did not take. It will be reported on Form 1099R to each beneficiary and on the beneficiary’s tax return.
On the owner’s final return, an explanation should be attached to show the TIN of the beneficiaries who took the RMD. And if the distribution year has ended without the RMD being taken, then a 5329 should be filed with the final return with an explanation of what happened and a request to excuse the excess accumulation penalty. The IRS will forgive the penalty in this situation.