IRA died 2012. Legal issue resolved and IRA rolled over to beneficiary Trust 2017.
The IRA owner died in 2012 at age 90. There was a discrepancy in the title of the trust (beneficiary) on the original application. The custodian accepted a SNT Trust as beneficiary in 2017 and the assets were rolled into the new SNT IRA account in 2017. We do not know if a RMD was taken in 2012.
FMV Dec 31 2016, $209,094. Age at death 90. Current age of deceased 98. Not until 2017 was a beneficiary recognized. Does the IRS care? or do we calculate RMD for 2012 to 2017?
How do we handle form 5329? How much RMD must we take?
Permalink Submitted by Alan - IRA critic on Wed, 2017-05-10 21:26
FIrst, ask the custodian if they received the trust information by 10/31/2013 of purposes of determining if the trust was qualified. If not, then the IRA has to be drained by the end of this year because the owner’s remaining life expectancy would have determined RMDs for 2013-present, but the entire remaining balance would then have to be distributed this year. However, if the trust was qualified, then RMDs would be based on the oldest beneficiary of the trust including any remainder beneficiaries. Either way, the RMD schedule would have been determined back in 2013 and would not change due to the SNT becoming the beneficiary. Once the correct RMDs can be determined for each year, a 5329 for each such year would have to be filed requesting the penalty waiver. To request the waivers, all the late RMDs up to the year of the waiver must be made up.