Inheriting a TRA after RBD
A client’s mother passed away at 75 years old and hadn’t taken her 2021 RMD. The beneficiary plans on moving the assets to an inherited IRA. Can all of the assets be moved to the inherited IRA, then have the RMD withdrawn from it in 2021, or does the RMD need to be taken (taxed to the beneficiary) directly from the original TIRA? Does it matter? Thanks
Permalink Submitted by Alan - IRA critic on Tue, 2021-04-06 20:07
It does not matter, but most custodians will require the inherited IRA balance to be transferred to a new inherited IRA under client’s SSN before any distribution can be made. Further, if client wants to further transfer the new inherited IRA to another custodian and take the year of death RMD later in the year from the new custodian’s inherited IRA, that is also acceptable. The IRS does not care which account distributes the year of death RMD as long as it is done in 2021.