QCD for Inheriting Spousal TIAA IRA who did not take their RMD for year of death
My client is 90, and her husband passed away earlier this year, he was 93.
He did not take his RMD for the year prior to passing.
Before my client (the spouse) can rollover her decedent husband’s TIAA to an IRA in her own name, she must satisfy his RMD. (TIAA will not rollover the husband’s RMD portion).
Can my client elect to have her husband’s RMD be distributed as a QCD?
Permalink Submitted by Alan - IRA critic on Mon, 2024-08-19 23:23
Short answer is Yes.
As long as the TIAA account is an IRA, TIAA is not required to distribute the year of death RMD unless client requests a distribution. Rather, if client notifies TIAA that they are electing to assume ownership of the inherited IRA and the balance is transferred to their own IRA by direct transfer, this is not a distribution. And once that’s done, the client can directly transfer the balance to an owned IRA at a different custodian. Since none of these transactions are distributions, there is no need for TIAA to require an RMD distribution. It can be done from the new IRA custodian’s account.
But since this RMD must be distributed at some point (actual deadline is 12/31/2025), and this is the final year that she can file jointly, she might as well let them distribute the RMD instead of having two RMDs due in 2025 when she is filing single.
As for the QCD, she can do a QCD as part of the year of death RMD to offset the taxable income.