Irrevocable Trust as beneficiary of an IRA
Can the Irrevocable Trust claim the RMD in the year of death as income on the trust’s tax return for that year? (The owner died before the RMD was taken) The trust has trustee, legal , and accounting fees that will exceed this RMD. This might be a way to shelter the RMD from tax unless the regs. specifically require the RMD to be distributed to the bennys in the same manner as the exisiting IRA funds. The remaining IRA funds will be distributed to each of 8 beneficiaries as inherited IRAs and the 1099s will be issued by the custodian of the funds.
Permalink Submitted by mk foss on Wed, 2014-04-23 01:03
The irrevocable trust can only claim the RMD in the year of death if the trust was the beneficiary. It sounds like there are 8 individual beneficiaries instead of a trust beneficiary. The date of death RMD can be paid to any IRA beneficiary but it cannot be paid to a trust if the trust is not a named beneficiary.