MRD in year after death
Individual died in December 2007 leaving approx. $2,500,000 IRA. He had taken his MRD for 2007 before passing away. Surviving spouse is named beneficiary with revocable living trust as successor. Spouse will decline about $500,000 and rollover the balance into her IRA but it won’t happen until 2008. Who needs to take a MRD for 2008? Trustee is saying no-one as it was not in the spouse’s name or the trust’s name on 12/31/07. I think the spouse has the requirement as she was the named beneficiary. What do you think?
Permalink Submitted by Kristin Kippen on Wed, 2008-01-30 22:44
The Spouse will be required to take an MRD for 2008 based on whatever amount of the account she owns in the year following death. So if she disclaims all but 20% of the account, her MRD would be based on 20% of $2,500,000 or whatever the value of the IRA was on 12/31/07. The spouse can use her own life expectancy (rather than deceased husband’s) to calculate her MRD provided they split the accounts into their separate shares soon after his death. It is best if it is split prior to 9.30.08 due to “designated beneficiary” rules.
Permalink Submitted by Bruce Steiner on Thu, 2008-01-31 04:08
The IRS allowed considerable flexibility on this in Revenue Ruling 2005-36: http://www.legalbitstream.com/scripts/isyswebext.dll?op=get&uri=/isysque…
Bruce Steiner, attorney
NYC
also admitted in NJ and FL