RMD Not Taken Before Death & Waiver Request
75 year old taxpayer died in 2013 before taking his RMD for the year. The bank would not distribute anything in taxpayers name once deceased. Plus, no beneficiary was listed on IRA so bank could not transfer to spouse and would not transfer to estates name until they received the NJ waiver form. So 2013 RMD was not taken for this one IRA. 2013 tax return is being filed as a joint return and we were looking at requesting a waiver on the Form 5329. The question is, does this get filed with the joint return since the IRA is still in the taxpayers name or does it get filed on the estate tax return? We expect the waiver any day now and will take both years once received. Thanks!
Permalink Submitted by Alan - IRA critic on Wed, 2014-07-16 19:12
It helps to have taken the delinquent RMDs before requesting the waiver, so that fact can become part of the waiver request. The 5329 should be filed with the 1041 because the decedent is not responsible for completing the RMD if they do not live through the entire year. The estate (if default beneficiary under the IRA agreement) becomes responsible, so the estate files the 5329.
Permalink Submitted by Bruce Steiner on Thu, 2014-07-17 02:40
Independent of the original question, you might look to see if there’s any way to get the IRA to the spouse for a rollover. See my article on this subject in the October 1997 issue of Estate Planning: http://www.kkwc.com/docs/AR20050125164755.pdf.
Permalink Submitted by Michael Iapoce on Fri, 2014-07-18 16:12
Thank you for the above answers. Would the estate take the RMD using table 1? Although the taxpayer was 75 when he died, he would have turned 76 before the end of the year. Do we use 75 or 76 to come up with the percent?
Permalink Submitted by Alan - IRA critic on Fri, 2014-07-18 20:27
The 2013 RMD is the decedent’s unsatisfied RMD figured using the decedent’s age that would have been attained by 12/31/2013 (76) and Table III. The 2014 RMD depends on who is the beneficiary. You suggest that the spouse is not the default beneficiary under the IRA agreement, but has this been verified? Even if the estate is the default beneficiary, if the spouse is the beneficiary under the will they can usually roll it over to their own IRA. If spouse can complete this before year end, the spouse is considered to have owned the IRA all year and surviving spouse’s age would determine the 2014 RMD using Table III. If the RMD is distributed while the estate is the beneficiary or to any beneficiary other than a spousal rollover, the decedent’s Table I divisor for 2013 reduced by 1.0 would apply for 2014.