Another RMD question, probably answered multiple times
Client dies in 2022 and was already taking RMD
Bene is non-spouse
How is the 10 year RMD amount calculated?
Bene non-spouse and more than 10 years younger than the decedent. Sorry to ask but is the bene an EDB?
No, not an EDB, and therefore subject to the 10 year rule with annual RMDs, but the 2023 annual RMD has been waived by the IRS.
Only for beneficiary RMDs under the 10-year rule has the penalty for failure to take the RMD been waived. Failure to complete the decedent’s year-of-death (2022) RMD is still subject to penalty. If the 2022 RMD was not completed by the due date of the 2022 tax return, including extensions, a waiver of the excess-accumulation penalty can be requested on 2022 Form 5329 Part IX after completing the 2022 RMD.
- If the IRA owner did not complete the 2022 RMD before passing, the client was responsible for completing it, and this RMD is not waived. There is no beneficiary RMD for 2022, just the owner’s RMD which must be distributed to the beneficiary if the owner passed without completing the 2022 RMD.
- The beneficiary RMD for 2023 using the 12/31/2022 balance for the client has been waived, and we don’t know whether the IRS will extend those waivers into 2024 or not.
IRA owner died early 2022 and the assets were rolled over to an inherited IRA in May. What value do we use to calculate the RMD? Date of death?
- The owner’s (client’s) RMD for 2022? That would be the 12/31/2021 balance divided by the owner’s age that year and Uniform Table. Bene should have taken that RMD by 4/15/2023. If not done, it still needs to be done and a 5329 filed by the beneficiary for 2023 to request waiver of the penalty.
- Or if you are asking about the beneficiary RMD for 2023, that has been waived by the IRS. It would have been based on the beneficiary’s portion of the inherited IRA value on 12/31/2022, not the date of death value.
Permalink Submitted by Alan - IRA critic on Fri, 2023-12-15 15:16
The single life table based on the beneficiary age in 2023 is used, but the IRS has waived the 2023 beneficiary RMD because the proposed Regs are still not final. The beneficiary must not be an EDB or the 10 year rule would not apply and the 2023 RMD would not be waived.