Beneficiary distributions
Father died August 2009 at age 73. Son was IRA beneficiary and took a distribution of $8,500 in 2009 and $12,000 in 2010. Is he required to drain remaining balance ($37,500) over the next 3 years or can he receive a life expectancy payout from that remaining balance?
Permalink Submitted by Alan Spross on Thu, 2011-08-18 22:12
If son failed to meet his life expectancy RMD with the 12,000 distribution last year, he can make up the difference and continue from there. RMDs for 2009 were waived. The 5 year rule cannot apply in any event because father passed AFTER his required beginning date.
If the 2010 amount fell short, son should file a 5329 for 2010 to request the penalty be waived and explain the “reasonable cause” for any omission and state that the shortage was made up. See Inst for Form 5329, p 6.
Permalink Submitted by fairira on Fri, 2011-08-19 16:52
Alan,
I assume you were being commendably thorough (as usual) by describing what the son should do if the 2010 distribution of $12,000. fell short of the RMD and also what others in similar circumstances should do.
In this specific case where the IRA value on 12/31/09 was about $50,000. (calculated by adding $12,000. distribution in 2010 and $37,500. current balance) and since the son was most probably not older than 55, his RMD should have been less than the $12,000. he took.
Does that seem correct or what am I missing?
Thanks.
Permalink Submitted by Alan Spross on Fri, 2011-08-19 17:24
You are correct. Checking through the specific numbers, there would be no shortage and the 12k would be considerably more than the actual 2010 RMD.