Husband was 82 and died in 2016. Spouse (age79 in 2016) was sole beneficiary. TIRA was placed in Beneficiary IRA status by custodian. Decedent’s RMD was not taken until Jan. 2017. (Assume a 5329 should be filed?) In Jan. 2017 Bene IRA was assumed as Wife’s own IRA. Question – will spouse have a bene RMD to take in 2017 based on year end 2016 value of bene IRA? How does her own RMD work for 2017? (she had other TIRA money end of 2016). -m
2017 RMD will be calculated from the Uniform Table. Per IRS Reg 1.408-8 Q 5, the surviving spouse is treated as if they owned the account the entire year. This rule does not apply to the year of death RMD which is calculated using the Uniform Table and decedent’s age.
Alan, you said “The beneficiary account balance on 12/31/2016 would be used to determine that RMD,” so, I thought that meant that she needed to take her BeneIRA RMD in 2017 based on 2016 values. Since that would be a BeneIRA RMD, wouldn’t that be Table 1? I understand her own IRA RMD for 2017 would use Uniform Table. – m
Permalink Submitted by Alan - IRA critic on Tue, 2017-11-14 18:03
Yes, a 5329 should be filed for 2016 due to the year of death RMD being completed late. Penalty waiver in this situation is almost automatic. For 2017 she is assumed to have owned the IRA for the entire year so would use the Uniform Table with her age at end of 2017 for the divisor. The beneficiary account balance on 12/31/2016 would be used to determine that RMD, but under the IRA aggregation rules she could satisfy her RMD for the former inherited account from any of her other owned IRA accounts.