RMD from an inherited IRA
I had a client over age 70 1/2 who passed away in 2017. She had been taking her RMD’s monthly. Her children were the beneficiaries. Her IRA distributed money to her estate in January and February of this year before the IRA was transferred to her children. Would those 2018 distributions offset any RMD requirement for 2018 for the children?
Permalink Submitted by Alan - IRA critic on Thu, 2018-05-31 22:50
If the children were the beneficiaries, the funds would have been distributed directly to the children. If a distribution was made to the estate then the estate must have been the beneficiary. Any distributions taken in 2018 would go first to complete the year of death RMD if client did not complete it. Anounts in excess of the 2017 RMD would be applied to the 2018 beneficiary RMDs, but it is not clear whether the estate or the children were the beneficiaries, and that makes a huge difference in determining what the beneficiary RMDs will be starting in 2018.