Reporting deceased IRA’s owner’s RMD
My mother passed away this year and one of my siblings plans to take her share of the inherited IRA as a lump sum. This will more than satisfy my mother’s 2022 RMD. I assume, however, that her 1099 for the year will not report any distributions. With this in mind how does one report that the RMD was made via the inheritance? Is this scenario covered by tax software? Thank you. Bob
Permalink Submitted by Alan - IRA critic on Wed, 2022-08-03 16:49
There is no specific RMD filing guidance for either the decedent’s final return other than the DOD, or the beneficiary’s return that addresses a year of death RMD. The IRS is left to track RMD compliance on their own, using the Form 5498 and statement on the decedent’s IRA post death, and the 5498 for the beneficiary inherited IRA which will show the name of both beneficiary and decedent. IRS computers could match the decedent’s name on both 5498 forms, and the check for a 1099R for the beneficiary inherited IRA to determine if the total year of death RMD was completed between the decedent and any beneficiaries. Does the IRS actually do this? Anecdotal indications are that they do not. As is the case for most RMD rules, the IRS relies on IRA custodians and plan administrators to enforce the RMD rules, which efforts are hit and miss.