SUB DIVIDE IRA BENICURY IS A TRUST
Decedent died at age 82 in October 2018. Had a IRA with the beneficiary of a trust. Opened up a inherited IRA under the trust name and EIN number. The Trust has been taking RMDs based on the oldest beneficiary. I need toto close out the trust. I would like to sub divide the IRA and open three inherited IRAs under the beneficiaries name and SS# . Would that be a taxable event or would each beneficiary be able to take RMDs out and pay taxes on that amount. I am getting conflicting answers from various professionals. Please advise.
Permalink Submitted by David Mertz on Wed, 2024-01-03 18:15
Various PLRs have consistently permitted an inherited IRA for the benefit of a trust to be subdivided and allocated out of the trust to trust beneficiaries by trustee-to-trustee transfer as inherited IRAs each one for the benefit of an individual beneficiary without it being considered to be a distribution. After doing so the RMD from each of the individual inherited IRAs must still be based on the age of the oldest beneficiary. Of course this also must not be prohibited under the terms of the trust’s governing instrument.