401 RMD, < 5% owner
401k participant, > 70.5 < 5% owner, died in 2016
RMD was not taken prior to death since it wasn’t required
spouse is 100% primary beneficiary
surviving spouse intends on rolling over the 401(k) account to an IRA
questions
Is a 2016 RMD due from the deceased 401(k)?
If so, is the surviving spouse responsible for taking it?
Anything else I should be aware of?
Thank you
Permalink Submitted by Alan - IRA critic on Mon, 2016-08-01 19:15
There is no 2016 RMD because he passed prior to his RBD. Surviving spouse should be able to roll over the entire balance to an IRA if the direct rollover is done by year end.
Permalink Submitted by ShipsnGiggles on Mon, 2016-08-01 20:31
comment. My undersanding of the 401k RMD rules for < 5% are - distributions can be until the later of 70.5 or the year of retirement. Am I correct (based on your response) this rule does not apply to death? If the participant had lived and retired this year; he would havee subject to a 2016 RMD. Instead, an RMD is not required because he died- correct? What is his RBD?Thank you
Permalink Submitted by Alan - IRA critic on Mon, 2016-08-01 21:56
You are correct. RBD is required beginning date for RMDs. Am assuming that participant was still employed in 2016 which would mean that his RBD would be sometime after 2016. As you indicated, if the participant dies before the RBD, there is no RMD for the year of death, whereas if the participant only retired in the 70.5 year or later, the retirement year would be an RMD distribution year and the RMD would have to distributed and not included in an IRA rollover. DIfferent rules for death vs. retirement.