Year of Death RMD
Hi,
My client, lets call her Sue, died in January this year at age 85. The RMD on her IRA was $15,000 and she had yet to take her RMD prior to passing. Her IRA has now been divided into 3 separate beneficiary IRAs for each of her 3 children. I know the IRS wants the $15,000 (Sue’s RMD) still distributed by year-end. My understanding is that as long as $15,000 aggregately is distributed out of the 3 beneficiary IRAs, that meets IRAs rules. Is that correct? So either of the following examples would suffice to meet Sue’s RMD.
1. Each child distributes $5,000 out of their inherited IRA by 12/31/2023 (3 x $5,000=$15,000)
2. One child (who is probably cashing out the inherited IRA to buy a property) takes at least $15,000 out of their account thus his other 2 siblings don’t need to take any RMD from their inherited IRA by 12/31/2023
Permalink Submitted by Alan - IRA critic on Wed, 2023-06-21 18:29
That is correct. Any combination adding up to 15k will satisfy the year of death RMD. In scenario 2, the others need to get confirmation from the distributing child that they actually took that distribution.
Permalink Submitted by David Rohde on Wed, 2024-02-28 16:01
I have a similiar situation and Found some other publications indicating that each Beneficiary must take out their equal prorportion. Is there any specific guidance from the IRS that speaks to this clearly? Below is from AscensusYear of DeathIf an IRA owner dies before satisfying his RMD for the year, the beneficiary must take the remaining RMD amount by December 31 in the year of death. If there are multiple beneficiaries, then each beneficiary must take their portion of the RMD: one beneficiary cannot satisfy the entire RMD amount or the shortfall of another beneficiary.
Permalink Submitted by Alan - IRA critic on Wed, 2024-02-28 16:13