Missed Distribution Question
I have a new client who just found out he is the beneficiary on 2 IRA’s and 2 Roth IRA’s from an ex girlfriend. She passed away in 2013. He was just notified this year, 2016, that he is the bene. on these accounts. What options should he consider taking regarding the missed distributions since no distributions, as far as he knows, have been taken for 2013(year of death), 2014 and 2015. Additional facts she was under 701/2 he will be 71 in July.
Permalink Submitted by Alan - IRA critic on Wed, 2016-06-01 00:00
He needs to determine the year end amounts for 2013, 2014 and 2015 in order to know the RMDs for each year. There is no year of death RMD for 2013 since she passed prior to her RBD. He then needs to make up the late RMDs and file Form 5329 for 2014 and 2015 and indicate the reason for the late RMDs. To determine the late RMDs he needs to confirm that he was the sole beneficiary on each account and was named on the accounts rather than inheriting through her estate, The Roth RMDs are almost surely tax free, and the TIRA RMDs are probably 100% taxable unless he can determine that he inherited basis from her final 8606.
Permalink Submitted by [email protected] on Wed, 2016-06-01 16:35
Thank you. You confirmed my thought process! I appreciate your feedback.