IRA Distributions made post-mortem
My mother was receiving monthly voluntary (not RMD) distributions at time of her death in 2012, those distributions are scheduled to continue after her death. The IRA has her son (me) and daughter as equal beneficiaries. It’s too late to stop the first distribution post-mortem. Do we (a) include that distribution in my mom’s tax return for 2012, (b) ask that it be reversed, (c) something else? It’s very clear that distributions prior to death will be on mom’s 2012 tax return and that once beneficiaries properly inherit the IRA and select distribution rules future distributions will be taxed to the beneficiaries on that basis. But what about this distribution in between?
Permalink Submitted by mk foss on Thu, 2012-04-12 17:33
The distributions received after the date of death are not reported on Form 1040. The income is normally taxable to the IRA beneficiaries, you’ll have to determine the best way to have those funds transferred depending on what type of account they were deposited in. If there were checks they could just be returned, but checks are going the way of the dinosaurs.
Permalink Submitted by Alan Spross on Thu, 2012-04-12 17:48
If already deposited, perhaps they would accept your personal checks and re issue the distribution under your SSNs to conform with their 2012 1099R reporting.
The funds should not be replaced in the IRA as they are non spouse death distributions not eligible for rollover.
This is the first post I have seen about this particular situation, and that is somewhat surprising. I guess it indicates that not too many people are taking automatic monthly distributions.