RMD in the year of death for spouse beneficiary
Husband died in Feb 2008 age 85 before taking the 2008 MRD. Spouse, age 80 is the named 100% beneficiary.
Before rolling over his IRA into her own IRA in 2008 must she take the 2008 MRD from his IRA account first (as a beneficiary distribution) or can she take it from her own IRA account after the rollover later in the year using her own life expectancy from the uniform table?.
Cites would be appreciated.
Permalink Submitted by Alan Spross on Fri, 2008-03-14 05:58
She should not have to take the RMD first. She should first assume ownership of that IRA, and she can then take the RMDs from any of her IRAs. She could also transfer it into her own IRA, since a transfer is not considered a distribution and rollover. See following from 2002 IRS RMD ruling:
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Q–8. What rules apply in the case of
a transfer (including a
recharacterization) from one IRA to
another?
A–8. (a) General rule. In the case of
a trustee-to-trustee transfer from one
IRA to another IRA that is not a
distribution and rollover, the transfer is
not treated as a distribution by the
transferor IRA for purposes of section
401(a)(9). Accordingly, the minimum
distribution requirement with respect to
the transferor IRA must still be satisfied.
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Now, with respect to the RMD for 2008, since she is assuming ownership in the year of her spouse’s death, the RMD for that year is that which would have applied to the deceased spouse, and would not be based on her own life expectancy. See the final part of att’d from the RMD Ruling:
Q–5. May an individual’s surviving
spouse elect to treat such spouse’s entire
interest as a beneficiary in an
individual’s IRA upon the death of the
individual (or the remaining part of
such interest if distribution to the
spouse has commenced) as the spouse’s
own account?
A–5. (a) The surviving spouse of an
individual may elect, in the manner
described in paragraph (b) of this A–5,
to treat the spouse’s entire interest as a
beneficiary in an individual’s IRA (or
the remaining part of such interest if
distribution thereof has commenced to
the spouse) as the spouse’s own IRA.
This election is permitted to be made at
any time after the individual’s date of
death. In order to make this election, the
spouse must be the sole beneficiary of
the IRA and have an unlimited right to
withdraw amounts from the IRA. If a
trust is named as beneficiary of the IRA,
this requirement is not satisfied even if
the spouse is the sole beneficiary of the
trust. If the surviving spouse makes the
election, the required minimum
distribution for the calendar year of the
election and each subsequent calendar
year is determined under section
401(a)(9)(A) with the spouse as IRA
owner and not section 401(a)(9)(B) with
the surviving spouse as the deceased
IRA owner’s beneficiary. However, if the
election is made in the calendar year
containing the IRA owner’s death, the
spouse is not required to take a required
minimum distribution as the IRA owner
for that calendar year. Instead, the
spouse is required to take a required
minimum distribution for that year,
determined with respect to the deceased
IRA owner under the rules of A–4(a) of
§ 1.401(a)(9)–5, to the extent such a
distribution was not made to the IRA
owner before death.
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