transfer rmd to beneficiary ira
Client over 70 1/2 passed away before taking 2010 rmd. Does the rmd have to be taken
before her ira is transferred to a beneficiary ira or can the entire amount be
transferred and the beneficiary take the rmd from the inherited ira before Dec 31?
Permalink Submitted by Alan Spross on Thu, 2010-06-03 22:44
Either way will work, basically because the transfer and/or the establishing of a separate beneficiary account is not a reportable distribution from the IRA. Also, either way the income will have to be reported on the beneficiary’s tax return, and not on the final return of the decedent or the estate income tax return.
In many of these situations, the beneficiary does not know whether the RMD had been taken out or not until the following year. And the IRA custodian will not know if the RMD might have been taken from another of the decedent’s IRA accounts. In that case, the year of death RMD should be distributed and Form 5329 filed to request that the excess accumulation penalty by excused.