Completing Last Year RMD for Parent after death
My mother passed in October and her IRA is being distributed to her 6 kids. Her 2015 distributions fell just short of her RMD. Now in 2016 as the funds are distributed to 6 new inherited IRA accounts do the 6 kids each need to take 1/6th of her remaining 2015 RMD? How is this treated from a tax standpoint since 2015 is over?
Permalink Submitted by Alan - IRA critic on Mon, 2016-01-25 19:55
The year of death RMD can be completed in any combination between the beneficiaries. Therefore, if one of the beneficiaries needs the money and is willing to complete the total year of death RMD, the others do not have to participate. Their own individual RMDs starting in 2016 must each be satisfied separately. The year of death RMD makeup distribution is taxable to the beneficiary(s) that withdraw it. That beneficiary should also file a 5329 with the 2015 return requesting waiver of the penalty for reasonable cause since the year of death RMD was not completed in 2015. The waiver request will be accepted by the IRS if the 5329 is filed correctly.