2010 RMD /spouse is the sole primary
Hello,
Spouse is moving the assets of his deceased husband to her own IRA in 2010. Husband passed away in 2009. Question is when wife is calculating the RMD on her own IRA acct does she not use the balance of yearend 2009 of her own IRA and her own life expectancy pymts. Does she have to worry about satisfying husband’s 2010 RMD? my answer would be since assets are moved to her IRA then it is her money and RMD is calculated based on her own age. So does wife have to satisfy the 2010 RMD for the husband as well? what are her options?
Permalink Submitted by Alan Spross on Thu, 2010-01-21 19:38
When the surviving spouse does a rollover in a year FOLLOWING the year of death, they are considered to have owned the IRA all year. The decedent’s RMD no longer is a factor.
The YE 2009 account balance for the IRA rolled over would be added to the balance of any other of the survivor’s IRA accounts for purposes of computing the 2010 RMD.
Permalink Submitted by Al Fry on Thu, 2010-01-21 21:16
Query, was the husband’s 2009 RMD satisfied?
Permalink Submitted by Alan Spross on Thu, 2010-01-21 23:38
While the 2009 RMD has been waived, it is altogether possible that RMDs in years before that have not been distributed. All the IRS Regs mention the year of death RMD assuming that to be the only year that RMDs were not completed, but we know that is often not the case.
Permalink Submitted by Janine Janine on Fri, 2010-01-22 18:44
Assuming all previous required RMD’s had been taken, if the spouse assumes ownership of the decendent’s IRA in [b]2010[/b], as stated, why would she need to add this amount to her [b]2009[/b] year-end balance? She did not own the IRA in 2009.
Permalink Submitted by Alan Spross on Fri, 2010-01-22 23:41
Good question, and this is not made very clear in Pub 590, although the applicable paragraph is on p 36 of the 2008 edition, “Surviving Spouse”.
There are several different ways the survivor can elect or be deemed to be the IRA owner, but if any one of them occurs, the paragraph states that the survivior is deemed to be the IRA owner for the entire year with the exception of the year of passing of the deceased spouse. In this case, owner spouse passed in 2009 and the rollover was made in 2010. If the surviving spouse was not subject to RMDs in 2010 this would be moot, but the survivor had reached 70.5.
The only practical effect of being deemed to own the IRA all year even if the rollover was not made until December would be to trigger use of the 12/31/09 valuation in determining the RMD for owned IRA accounts. Remember that both spouses were RMD age and therefore an RMD would be due every year from both IRAs had both spouses lived, so it would not be logical that the death of one spouse would result in avoiding an RMD for that spouse’s IRA balance for a year.
One situation where an RMD can be avoided is if the first spouse passses at age 70.5 (an RMD distribution year) but prior to the RBD. In that case, if the surviving spouse is not subject to RMDs they can assume ownership and erase the RMD that would have been due by the RBD.