Year of Death RMD EXTENSION
With the IRS allowing year of death RMD to be paid out by the following year.
I assume 2 RMD’s would then be taken the following year. The first RMD (the one pushed to the following year) is the deceased’s calculated RMD from prior year then the 2nd is RMD calculated using beneficiaries divisor?
Great to hear they extended but at same time never seen clarity if then 2 have to be taken the following year which I assuming is required.
Permalink Submitted by Alan - IRA critic on Thu, 2024-12-19 09:57
Yes, that will be the case starting in 2025. From 2021-2024 10 year rule beneficiary RMDs were waived, so some 10 year rule beneficiaries might have taken the year of death RMD in the year after death and would not have taken their own beneficiary RMD.
Permalink Submitted by MIKE KRUCHTEN on Fri, 2024-12-20 07:26
Let me add more clarity to my post.
Client age 85, passed 12/1/24. Client had not taken his 2024 RMD prior to death. The beneficiaries prefer not to take his RMD in 2024 due to logistic constraints and with new IRS regs seems they can wait until end of 2025 to take his 2024 RMD.
However, I would assume the beneficiaries have to take both the 2024 missed RMD and their individual bene calculated RMD based on their DOB in 2025 also. I cant imagine they can take his missed 2024 RMD in lieu of their bene RMD in 2025.
Permalink Submitted by Alan - IRA critic on Fri, 2024-12-20 11:36
Correct, both RMDs must be completed, but there is a question whether the year of death RMD can be delayed until year end 2025, but no question that it can be delayed until the due date (plus extensions) for the 2024 return. Therefore it can be delayed until 4/15/2025 without an extension, or 10/15/2025 if extensions are filed, and that should provide enough time.
And like any other year of death RMD, it can be completed in any combination between the beneficiaries, therefore if one beneficiary wanted to take the full amount, the others would not have to take their share.
If the above is still not enough time, the beneficiaries could wait until year end 2025, complete the year of death RMD then, and file a 5329 to request waiver of the penalty, which the IRS would grant.
Of course, any year of death RMD taken in 2025 does not affect the beneficiary RMD for 2025, and all 2025 distributions will be taxable in 2025.