Inherited IRA and RMD’s Not Taken Yet
Client is 1 of 12 benef’s of an inherited IRA and Roth IRA.
Client is age 67.
IRA owner was 84 and died 1/6/2021 and “had not” taken his RMD for 2021 yet.
How is the RMD accomplished ? The client has already received his share (1 of 12) of the IRA and the RMD was not taken out …. What should he do ?
RD in NC
Permalink Submitted by Alan - IRA critic on Fri, 2021-06-11 14:53
The 12 beneficiaries are jointly responsible for the year of the death RMD (TIRA only). That means that if any of them have taken or plan to take a large distribution, it could cover the obligation of the others. That said, coordination between this many beneficiaries is often difficult or impossible. In such a case, it is more customary for each beneficiary to simply pro rate the year of death RMD which would be 1/12 of it for the client. I have not heard that the IRS goes after any beneficiary who took out at least their pro rata share of the year of death RMD. Therefore, unless it can be determined that enough of the others will cover the entire year of death RMD, client should take out at least 1/12 of the year of death RMD. Unless a beneficiary is an EDB (eligible designated beneficiary) they are subject to the 10 year rule meaning no annual RMDs starting in 2022, but the inherited IRAs must be drained by 12/31/2031.