Taking RMD for late parent and then follow 10 year rule as her beneficiary

Submitted by Chris Collins on Thu, 2023-05-18 19:22

Mother died in early January 2023. She had not yet taken a 2023 RMD from her Traditional IRA. I am listed as sole beneficiary of the account, and am estate executor. Have not moved the funds into an inherited IRA to date.

1. Since she did live a few days into 2023, does an RMD have to be taken for her? If so, based on her age? (she would have turned 99 on this year’s birthday.) Would the amount have to be withdrawn Before the remainder goes into an inherited IRA for me?

2. As of now, am I correct that the first RMD of the inherited IRA will be taken this year, not a year ahead? For simplicity, I would take it this calendar year, rather then defer until the following April 15.

I saw a comment made elsewhere in this forum that I do not have to take two RMD withdrawals in one year. Not sure what rule takes precedence in this situation.

Thank You

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Permalink Submitted by Alan - IRA critic on Thu, 2023-05-18 21:43

Yes, you are responsible for completing her 2023 RMD, which is the amount she would have had to withdraw. After you have the inherited IRA retitled in beneficiary form you can complete that RMD, but not before. The custodian will only allow distributions to be made after you have the IRA retitled and the funds transferred to a new inherited IRA under your SSN. You will get a 1099R and will have to report this RMD on your 2023 return.
You will be subject to the 10 year rule and will also have to take beneficiary RMDs in years 1-9 (2024-2032) and drain the inherited IRA in 2033. Your beneficiary RMDs will be based on your age in 2024 using the single life table divisor. Each year after 2024 you reduce that divisor by 1.0.
To be clear, all you need to withdraw this year is mother’s 2023 RMD. Your own beneficiary RMDs start in 2024. Of course, anytime you wish you can take out more than the RMD, just not less. Each of your RMDs are due on 12/31 of the RMD year. 4/15 is not a factor.
The IRA is not part of the probate estate for which you are the executor. Your beneficiary status is independent of the estate.